Correlation Between International Business and Genpact

Specify exactly 2 symbols:
Can any of the company-specific risk be diversified away by investing in both International Business 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 International Business and Genpact into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between International Business Machines and Genpact, you can compare the effects of market volatilities on International Business 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 International Business with a short position of Genpact. Check out your portfolio center. Please also check ongoing floating volatility patterns of International Business and Genpact.

Diversification Opportunities for International Business and Genpact

0.15
  Correlation Coefficient

Average diversification

The 3 months correlation between International and Genpact is 0.15. Overlapping area represents the amount of risk that can be diversified away by holding International Business Machine and Genpact in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Genpact and International Business 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 International Business Machines 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 has no effect on the direction of International Business i.e., International Business and Genpact go up and down completely randomly.

Pair Corralation between International Business and Genpact

Considering the 90-day investment horizon International Business Machines is expected to under-perform the Genpact. But the stock apears to be less risky and, when comparing its historical volatility, International Business Machines is 1.19 times less risky than Genpact. The stock trades about -0.02 of its potential returns per unit of risk. The Genpact is currently generating about 0.02 of returns per unit of risk over similar time horizon. If you would invest  4,587  in Genpact on July 7, 2022 and sell it today you would earn a total of  26.00  from holding Genpact or generate 0.57% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthInsignificant
Accuracy100.0%
ValuesDaily Returns

International Business Machine  vs.  Genpact

 Performance (%) 
       Timeline  
International Business 
International Performance
0 of 100
Over the last 90 days International Business Machines has generated negative risk-adjusted returns adding no value to investors with long positions. Even with latest unsteady performance, the Stock's fundamental drivers remain steady and the new chaos on Wall Street may also be a sign of medium-term gains for the company stakeholders.

International Price Channel

Genpact 
Genpact Performance
4 of 100
Compared to the overall equity markets, risk-adjusted returns on investments in Genpact are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. 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

International Business and Genpact Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with International Business and Genpact

The main advantage of trading using opposite International Business and Genpact positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if International Business 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.
International Business vs. Merck Kgaa Dm
International Business vs. Abbott Laboratories
International Business vs. Abiomed
International Business vs. Eli Lilly And
The idea behind International Business Machines and Genpact 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.
Genpact vs. Central Japan Railway
Genpact vs. Central Japan Railwa
Genpact vs. Firstgroup Plc Uns
Genpact vs. East Japan Railway
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.

Other Complementary Tools

Portfolio Rebalancing
Analyze risk-adjusted returns against different time horizons to find asset-allocation targets
Go
Watchlist Optimization
Optimize watchlists to build efficient portfolio or rebalance existing positions based on mean-variance optimization algorithm
Go
Pair Correlation
Compare performance and examine fundamental relationship between any two equity instruments
Go
Technical Analysis
Check basic technical indicators and analysis based on most latest market data
Go
Portfolio Comparator
Compare the composition, asset allocations and performance of any two portfolios in your account
Go
Portfolio File Import
Quickly import all of your third-party portfolios from your local drive in csv format
Go
CEO Directory
Screen CEOs from public companies around the world
Go
Alpha Finder
Use alpha and beta coefficients to find investment opportunities after accounting for the risk
Go
CEO Directory
Screen CEOs from public companies around the world
Go
Portfolio File Import
Quickly import all of your third-party portfolios from your local drive in csv format
Go
Global Correlations
Find global opportunities by holding instruments from different markets
Go
Portfolio Suggestion
Get suggestions outside of your existing asset allocation including your own model portfolios
Go