Correlation Between Genpact and Chindata Group

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Can any of the company-specific risk be diversified away by investing in both Genpact and Chindata Group 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 Chindata Group into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Genpact and Chindata Group Holdings, you can compare the effects of market volatilities on Genpact and Chindata Group 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 Chindata Group. Check out your portfolio center. Please also check ongoing floating volatility patterns of Genpact and Chindata Group.

Diversification Opportunities for Genpact and Chindata Group

0.42
  Correlation Coefficient

Very weak diversification

The 3 months correlation between Genpact and Chindata is 0.42. Overlapping area represents the amount of risk that can be diversified away by holding Genpact and Chindata Group Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Chindata Group Holdings 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 are associated (or correlated) with Chindata Group. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Chindata Group Holdings has no effect on the direction of Genpact i.e., Genpact and Chindata Group go up and down completely randomly.

Pair Corralation between Genpact and Chindata Group

Taking into account the 90-day investment horizon Genpact is expected to generate 0.26 times more return on investment than Chindata Group. However, Genpact is 3.89 times less risky than Chindata Group. It trades about 0.02 of its potential returns per unit of risk. Chindata Group Holdings is currently generating about 0.0 per unit of risk. If you would invest  4,054  in Genpact on April 5, 2022 and sell it today you would earn a total of  238.00  from holding Genpact or generate 5.87% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthWeak
Accuracy100.0%
ValuesDaily Returns

Genpact  vs.  Chindata Group Holdings

 Performance (%) 
      Timeline 
Genpact 
Genpact Performance
0 of 100
Over the last 90 days Genpact has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of rather sound technical and fundamental indicators, Genpact is not utilizing all of its potentials. The recent stock price tumult, may contribute to shorter-term losses for the shareholders.

Structure and Payout Changes

Forward Annual Dividend Yield
0.0116
Payout Ratio
0.19
Forward Annual Dividend Rate
0.5
Dividend Date
2022-06-24
Ex Dividend Date
2022-06-09

Genpact Price Channel

Chindata Group Holdings 
Chindata Performance
8 of 100
Compared to the overall equity markets, risk-adjusted returns on investments in Chindata Group Holdings are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. In spite of rather conflicting fundamental indicators, Chindata Group exhibited solid returns over the last few months and may actually be approaching a breakup point.

Structure and Payout Changes

Last Split Factor
15:1
Last Split Date
2013-06-18

Chindata Price Channel

Genpact and Chindata Group Volatility Contrast

 Predicted Return Density 
      Returns 

Pair Trading with Genpact and Chindata Group

The main advantage of trading using opposite Genpact and Chindata Group positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Genpact position performs unexpectedly, Chindata Group 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 Chindata Group will offset losses from the drop in Chindata Group's long position.
The idea behind Genpact and Chindata Group Holdings 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 Competition Analyzer module to analyze and compare many basic indicators for a group of related or unrelated entities.

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