Correlation Between ExlService Holdings and Genpact
Can any of the company-specific risk be diversified away by investing in both ExlService Holdings 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 ExlService Holdings and Genpact into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between ExlService Holdings and Genpact Limited, you can compare the effects of market volatilities on ExlService Holdings 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 ExlService Holdings with a short position of Genpact. Check out your portfolio center. Please also check ongoing floating volatility patterns of ExlService Holdings and Genpact.
Diversification Opportunities for ExlService Holdings and Genpact
0.56 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between ExlService and Genpact is 0.56. Overlapping area represents the amount of risk that can be diversified away by holding ExlService Holdings and Genpact Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Genpact Limited and ExlService Holdings 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 ExlService Holdings 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 ExlService Holdings i.e., ExlService Holdings and Genpact go up and down completely randomly.
Pair Corralation between ExlService Holdings and Genpact
Given the investment horizon of 90 days ExlService Holdings is expected to under-perform the Genpact. In addition to that, ExlService Holdings is 1.32 times more volatile than Genpact Limited. It trades about -0.16 of its total potential returns per unit of risk. Genpact Limited is currently generating about -0.2 per unit of volatility. If you would invest 3,276 in Genpact Limited on January 27, 2024 and sell it today you would lose (186.00) from holding Genpact Limited or give up 5.68% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
ExlService Holdings vs. Genpact Limited
Performance |
| Timeline |
| ExlService Holdings |
| Genpact Limited |
ExlService Holdings and Genpact Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with ExlService Holdings and Genpact
The main advantage of trading using opposite ExlService Holdings and Genpact positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ExlService Holdings 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.| ExlService Holdings vs. WNS Holdings | ExlService Holdings vs. ASGN Inc | ExlService Holdings vs. CACI International | ExlService Holdings vs. Perficient |
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 Pattern Recognition module to use different Pattern Recognition models to time the market across multiple global exchanges.
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