Correlation Between Euronet Worldwide and Genpact
Can any of the company-specific risk be diversified away by investing in both Euronet Worldwide and Genpact at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining Euronet Worldwide and Genpact into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Euronet Worldwide and Genpact Limited, you can compare the effects of market volatilities on Euronet Worldwide and Genpact and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in Euronet Worldwide with a short position of Genpact. Check out your portfolio center. Please also check ongoing floating volatility patterns of Euronet Worldwide and Genpact.
Diversification Opportunities for Euronet Worldwide and Genpact
-0.23 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Euronet and Genpact is -0.23. Overlapping area represents the amount of risk that can be diversified away by holding Euronet Worldwide and Genpact Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Genpact Limited and Euronet Worldwide is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on Euronet Worldwide are associated (or correlated) with Genpact. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Genpact Limited has no effect on the direction of Euronet Worldwide i.e., Euronet Worldwide and Genpact go up and down completely randomly.
Pair Corralation between Euronet Worldwide and Genpact
Given the investment horizon of 90 days Euronet Worldwide is expected to generate 1.01 times more return on investment than Genpact. However, Euronet Worldwide is 1.01 times more volatile than Genpact Limited. It trades about -0.17 of its potential returns per unit of risk. Genpact Limited is currently generating about -0.19 per unit of risk. If you would invest 10,863 in Euronet Worldwide on January 20, 2024 and sell it today you would lose (559.00) from holding Euronet Worldwide or give up 5.15% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Euronet Worldwide vs. Genpact Limited
Performance |
| Timeline |
| Euronet Worldwide |
| Genpact Limited |
Euronet Worldwide and Genpact Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Euronet Worldwide and Genpact
The main advantage of trading using opposite Euronet Worldwide and Genpact positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Euronet Worldwide position performs unexpectedly, Genpact can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in Genpact will offset losses from the drop in Genpact's long position.| Euronet Worldwide vs. Palo Alto Networks | Euronet Worldwide vs. Zscaler | Euronet Worldwide vs. Cloudflare | Euronet Worldwide vs. Okta Inc |
| Genpact vs. ASGN Inc | Genpact vs. CACI International | Genpact vs. Perficient | Genpact vs. Science Applications International |
Check out your portfolio center.Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the Portfolio Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.
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