Correlation Between Verisk Analytics and Genpact
Can any of the company-specific risk be diversified away by investing in both Verisk Analytics 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 Verisk Analytics and Genpact into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Verisk Analytics and Genpact Limited, you can compare the effects of market volatilities on Verisk Analytics 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 Verisk Analytics with a short position of Genpact. Check out your portfolio center. Please also check ongoing floating volatility patterns of Verisk Analytics and Genpact.
Diversification Opportunities for Verisk Analytics and Genpact
0.72 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Verisk and Genpact is 0.72. Overlapping area represents the amount of risk that can be diversified away by holding Verisk Analytics and Genpact Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Genpact Limited and Verisk Analytics 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 Verisk Analytics 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 Verisk Analytics i.e., Verisk Analytics and Genpact go up and down completely randomly.
Pair Corralation between Verisk Analytics and Genpact
Given the investment horizon of 90 days Verisk Analytics is expected to generate 0.47 times more return on investment than Genpact. However, Verisk Analytics is 2.12 times less risky than Genpact. It trades about -0.18 of its potential returns per unit of risk. Genpact Limited is currently generating about -0.21 per unit of risk. If you would invest 24,252 in Verisk Analytics on December 29, 2023 and sell it today you would lose (679.00) from holding Verisk Analytics or give up 2.8% of portfolio value over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Significant |
Accuracy | 100.0% |
Values | Daily Returns |
Verisk Analytics vs. Genpact Limited
Performance |
Timeline |
Verisk Analytics |
Genpact Limited |
Verisk Analytics and Genpact Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Verisk Analytics and Genpact
The main advantage of trading using opposite Verisk Analytics and Genpact positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Verisk Analytics 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.Verisk Analytics vs. Broadridge Financial Solutions | Verisk Analytics vs. BrightView Holdings | Verisk Analytics vs. First Advantage Corp | Verisk Analytics vs. LegalZoom |
Genpact vs. Fiserv Inc | Genpact vs. Gartner | Genpact vs. Kyndryl Holdings | Genpact vs. Magic Software Enterprises |
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 Funds Screener module to find actively-traded funds from around the world traded on over 30 global exchanges.
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