Correlation Between Genpact and ASGN

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

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

Diversification Opportunities for Genpact and ASGN

0.7

Correlation Coefficient

Genpact  ASGN

Poor diversification

The 3 months correlation between Genpact and ASGN is 0.7. Overlapping area represents the amount of risk that can be diversified away by holding Genpact Limited and ASGN Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ASGN Inc 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 ASGN. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ASGN Inc has no effect on the direction of Genpact i.e., Genpact and ASGN go up and down completely randomly.

Pair Corralation between Genpact and ASGN

Taking into account the 90-day investment horizon Genpact Limited is expected to generate 0.91 times more return on investment than ASGN. However, Genpact Limited is 1.1 times less risky than ASGN. It trades about 0.01 of its potential returns per unit of risk. ASGN Inc is currently generating about -0.12 per unit of risk. If you would invest  4,439  in Genpact Limited on February 16, 2025 and sell it today you would lose (20.00) from holding Genpact Limited or give up 0.45% of portfolio value over 90 days.

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

Genpact Limited  vs.  ASGN Inc

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

ASGN Inc

Risk-Adjusted Performance

Very Weak

Over the last 90 days ASGN Inc has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of uncertain performance in the last few months, the Stock's technical and fundamental indicators remain very healthy which may send shares a bit higher in June 2025. The recent disarray may also be a sign of long period up-swing for the firm investors.

Pair Trading with Genpact and ASGN

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

The idea behind Genpact Limited and ASGN Inc 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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.