Correlation Between Genpact and Allegiant Travel

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

By analyzing existing cross correlation between Genpact Limited and Allegiant Travel, you can compare the effects of market volatilities on Genpact and Allegiant Travel 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 Allegiant Travel. Check out your portfolio center. Please also check ongoing floating volatility patterns of Genpact and Allegiant Travel.

Diversification Opportunities for Genpact and Allegiant Travel

-0.43

Correlation Coefficient

Genpact  Allegiant Travel

Very good diversification

The 3 months correlation between Genpact and Allegiant is -0.43. Overlapping area represents the amount of risk that can be diversified away by holding Genpact Limited and Allegiant Travel in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Allegiant Travel 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 Allegiant Travel. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Allegiant Travel has no effect on the direction of Genpact i.e., Genpact and Allegiant Travel go up and down completely randomly.

Pair Corralation between Genpact and Allegiant Travel

Taking into account the 90-day investment horizon Genpact Limited is expected to under-perform the Allegiant Travel. But the stock apears to be less risky and, when comparing its historical volatility, Genpact Limited is 1.6 times less risky than Allegiant Travel. The stock trades about -0.09 of its potential returns per unit of risk. The Allegiant Travel is currently generating about 0.01 of returns per unit of risk over similar time horizon. If you would invest  4,941  in Allegiant Travel on May 6, 2025 and sell it today you would lose (129.00) from holding Allegiant Travel or give up 2.61% of portfolio value over 90 days.

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

Genpact Limited  vs.  Allegiant Travel

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 unfluctuating performance in the last few months, the Stock's technical and fundamental indicators remain nearly stable which may send shares a bit higher in September 2025. The current disturbance may also be a sign of long-run up-swing for the company stockholders.

Allegiant Travel

Risk-Adjusted Performance

Very Weak

Over the last 90 days Allegiant Travel has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable technical and fundamental indicators, Allegiant Travel is not utilizing all of its potentials. The current stock price uproar, may contribute to short-horizon losses for the private investors.

Pair Trading with Genpact and Allegiant Travel

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

The idea behind Genpact Limited and Allegiant Travel 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 Funds Screener module to find actively-traded funds from around the world traded on over 30 global exchanges.