Correlation Between Genpact and EMS-CHEMIE HOLDING

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

Diversification Opportunities for Genpact and EMS-CHEMIE HOLDING

-0.13
  Correlation Coefficient

Good diversification

The 3 months correlation between Genpact and EMS-CHEMIE is -0.13. Overlapping area represents the amount of risk that can be diversified away by holding Genpact Limited and EMS-CHEMIE HOLDING AG in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on EMS-CHEMIE HOLDING 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 EMS-CHEMIE HOLDING. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of EMS-CHEMIE HOLDING has no effect on the direction of Genpact i.e., Genpact and EMS-CHEMIE HOLDING go up and down completely randomly.

Pair Corralation between Genpact and EMS-CHEMIE HOLDING

Taking into account the 90-day investment horizon Genpact Limited is expected to generate 0.74 times more return on investment than EMS-CHEMIE HOLDING. However, Genpact Limited is 1.35 times less risky than EMS-CHEMIE HOLDING. It trades about 0.03 of its potential returns per unit of risk. EMS-CHEMIE HOLDING AG is currently generating about -0.01 per unit of risk. If you would invest  3,967  in Genpact Limited on September 2, 2022 and sell it today you would earn a total of  644.00  from holding Genpact Limited or generate 16.23% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Against 
StrengthInsignificant
Accuracy100.0%
ValuesDaily Returns

Genpact Limited  vs.  EMS-CHEMIE HOLDING AG

 Performance (%) 
       Timeline  
Genpact Limited 
Genpact Performance
0 of 100
Over the last 90 days Genpact Limited 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 latest stock price tumult, may contribute to shorter-term losses for the shareholders.

Genpact Price Channel

EMS-CHEMIE HOLDING 
EMS-CHEMIE Performance
0 of 100
Over the last 90 days EMS-CHEMIE HOLDING AG has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of rather sound technical indicators, EMS-CHEMIE HOLDING is not utilizing all of its potentials. The latest stock price tumult, may contribute to shorter-term losses for the shareholders.

EMS-CHEMIE Price Channel

Genpact and EMS-CHEMIE HOLDING Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Genpact and EMS-CHEMIE HOLDING

The main advantage of trading using opposite Genpact and EMS-CHEMIE HOLDING positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Genpact position performs unexpectedly, EMS-CHEMIE HOLDING 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 EMS-CHEMIE HOLDING will offset losses from the drop in EMS-CHEMIE HOLDING's long position.
Genpact vs. Coca-Cola Co
The idea behind Genpact Limited and EMS-CHEMIE HOLDING AG 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.
EMS-CHEMIE HOLDING vs. Dupont De Nemours
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 Portfolio Suggestion module to get suggestions outside of your existing asset allocation including your own model portfolios.

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