Correlation Between Bliss GVS and Genpact

Can any of the company-specific risk be diversified away by investing in both Bliss GVS 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 Bliss GVS and Genpact into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Bliss GVS Pharma and Genpact Limited, you can compare the effects of market volatilities on Bliss GVS 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 Bliss GVS with a short position of Genpact. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bliss GVS and Genpact.

Diversification Opportunities for Bliss GVS and Genpact

0.29

Correlation Coefficient

Bliss GVS  Genpact

Modest diversification

The 3 months correlation between Bliss and Genpact is 0.29. Overlapping area represents the amount of risk that can be diversified away by holding Bliss GVS Pharma and Genpact Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Genpact Limited and Bliss GVS 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 Bliss GVS Pharma 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 Bliss GVS i.e., Bliss GVS and Genpact go up and down completely randomly.

Pair Corralation between Bliss GVS and Genpact

Assuming the 90 days trading horizon Bliss GVS Pharma is expected to generate 1.78 times more return on investment than Genpact. However, Bliss GVS is 1.78 times more volatile than Genpact Limited. It trades about 0.05 of its potential returns per unit of risk. Genpact Limited is currently generating about -0.03 per unit of risk. If you would invest  7,125  in Bliss GVS Pharma on February 3, 2024 and sell it today you would earn a total of  4,780  from holding Bliss GVS Pharma or generate 67.09% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	98.18%
Values	Daily Returns

Bliss GVS Pharma  vs.  Genpact Limited

Bliss GVS Pharma

Risk-Adjusted Performance

0 of 100

Insignificant

Over the last 90 days Bliss GVS Pharma has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly stable basic indicators, Bliss GVS is not utilizing all of its potentials. The newest stock price fuss, may contribute to near-short-term losses for the sophisticated investors.

Genpact Limited

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Genpact Limited has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest uncertain performance, the Stock's technical and fundamental indicators remain stable and the current disturbance on Wall Street may also be a sign of long-run gains for the company stockholders.

Pair Trading with Bliss GVS and Genpact

The main advantage of trading using opposite Bliss GVS and Genpact positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bliss GVS 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.

The idea behind Bliss GVS Pharma and Genpact Limited pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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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 Stocks Directory module to find actively traded stocks across global markets.