Correlation Between Gartner and Genpact
Can any of the company-specific risk be diversified away by investing in both Gartner 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 Gartner and Genpact into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Gartner and Genpact Limited, you can compare the effects of market volatilities on Gartner 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 Gartner with a short position of Genpact. Check out your portfolio center. Please also check ongoing floating volatility patterns of Gartner and Genpact.
Diversification Opportunities for Gartner and Genpact
Good diversification
The 3 months correlation between Gartner and Genpact is -0.2. Overlapping area represents the amount of risk that can be diversified away by holding Gartner and Genpact Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Genpact Limited and Gartner 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 Gartner 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 Gartner i.e., Gartner and Genpact go up and down completely randomly.
Pair Corralation between Gartner and Genpact
Allowing for the 90-day total investment horizon Gartner is expected to generate 1.15 times more return on investment than Genpact. However, Gartner is 1.15 times more volatile than Genpact Limited. It trades about 0.16 of its potential returns per unit of risk. Genpact Limited is currently generating about -0.01 per unit of risk. If you would invest 32,576 in Gartner on January 25, 2024 and sell it today you would earn a total of 12,530 from holding Gartner or generate 38.46% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Gartner vs. Genpact Limited
Performance |
| Timeline |
| Gartner |
| Genpact Limited |
Gartner and Genpact Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Gartner and Genpact
The main advantage of trading using opposite Gartner and Genpact positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Gartner 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.| Gartner vs. CACI International | Gartner vs. CDW Corp | Gartner vs. Jack Henry Associates | Gartner vs. Broadridge Financial Solutions |
| Genpact vs. CACI International | Genpact vs. CDW Corp | Genpact vs. Jack Henry Associates | Genpact vs. Broadridge Financial Solutions |
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 AI Portfolio Architect module to use AI to generate optimal portfolios and find profitable investment opportunities.
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