Correlation Between Driven Brands and Genpact

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

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

Diversification Opportunities for Driven Brands and Genpact

-0.38

Correlation Coefficient

Driven Brands  Genpact

Very good diversification

The 3 months correlation between Driven and Genpact is -0.38. Overlapping area represents the amount of risk that can be diversified away by holding Driven Brands Holdings and Genpact Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Genpact Limited and Driven Brands 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 Driven Brands 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 Driven Brands i.e., Driven Brands and Genpact go up and down completely randomly.

Pair Corralation between Driven Brands and Genpact

Given the investment horizon of 90 days Driven Brands Holdings is expected to generate 1.08 times more return on investment than Genpact. However, Driven Brands is 1.08 times more volatile than Genpact Limited. It trades about -0.06 of its potential returns per unit of risk. Genpact Limited is currently generating about -0.1 per unit of risk. If you would invest  1,809  in Driven Brands Holdings on March 26, 2025 and sell it today you would lose (46.00) from holding Driven Brands Holdings or give up 2.54% of portfolio value over 90 days.

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

Driven Brands Holdings  vs.  Genpact Limited

Driven Brands Holdings

Risk-Adjusted Performance

Very Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Driven Brands Holdings are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. In spite of very healthy basic indicators, Driven Brands is not utilizing all of its potentials. The current stock price disarray, may contribute to short-term losses for the investors.

Genpact Limited

Risk-Adjusted Performance

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 July 2025. The current disturbance may also be a sign of long-run up-swing for the company stockholders.

Pair Trading with Driven Brands and Genpact

The main advantage of trading using opposite Driven Brands and Genpact positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Driven Brands 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 Driven Brands Holdings 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 Price Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.