Correlation Between Genpact and Fidelity National

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

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

Diversification Opportunities for Genpact and Fidelity National

-0.83

Correlation Coefficient

Genpact  Fidelity National

Pay attention - limited upside

The 3 months correlation between Genpact and Fidelity is -0.83. Overlapping area represents the amount of risk that can be diversified away by holding Genpact Limited and Fidelity National Information in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fidelity National and Genpact 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 Genpact Limited are associated (or correlated) with Fidelity National. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Fidelity National has no effect on the direction of Genpact i.e., Genpact and Fidelity National go up and down completely randomly.

Pair Corralation between Genpact and Fidelity National

Taking into account the 90-day investment horizon Genpact Limited is expected to generate 1.25 times more return on investment than Fidelity National. However, Genpact is 1.25 times more volatile than Fidelity National Information. It trades about -0.23 of its potential returns per unit of risk. Fidelity National Information is currently generating about -0.28 per unit of risk. If you would invest  3,295  in Genpact Limited on January 28, 2024 and sell it today you would lose (205.00) from holding Genpact Limited or give up 6.22% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Significant
Accuracy	100.0%
Values	Daily Returns

Genpact Limited  vs.  Fidelity National Information

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 uncertain performance in the last few months, the Stock's technical and fundamental indicators remain nearly stable which may send shares a bit higher in May 2024. The current disturbance may also be a sign of long-run up-swing for the company stockholders.

Fidelity National

Risk-Adjusted Performance

9 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Fidelity National Information are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively weak forward indicators, Fidelity National may actually be approaching a critical reversion point that can send shares even higher in May 2024.

Pair Trading with Genpact and Fidelity National

The main advantage of trading using opposite Genpact and Fidelity National positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Genpact position performs unexpectedly, Fidelity National 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 Fidelity National will offset losses from the drop in Fidelity National's long position.

The idea behind Genpact Limited and Fidelity National Information 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.

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 Sync Your Broker module to sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors..