Correlation Between AMREP and Genpact

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

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

Diversification Opportunities for AMREP and Genpact

-0.2

Correlation Coefficient

AMREP  Genpact

Good diversification

The 3 months correlation between AMREP and Genpact is -0.2. Overlapping area represents the amount of risk that can be diversified away by holding AMREP and Genpact Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Genpact Limited and AMREP 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 AMREP 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 Limited has no effect on the direction of AMREP i.e., AMREP and Genpact go up and down completely randomly.

Pair Corralation between AMREP and Genpact

Considering the 90-day investment horizon AMREP is expected to under-perform the Genpact. In addition to that, AMREP is 1.75 times more volatile than Genpact Limited. It trades about -0.09 of its total potential returns per unit of risk. Genpact Limited is currently generating about 0.21 per unit of volatility. If you would invest  4,426  in Genpact Limited on November 19, 2024 and sell it today you would earn a total of  1,079  from holding Genpact Limited or generate 24.38% return on investment over 90 days.

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

AMREP  vs.  Genpact Limited

AMREP

Risk-Adjusted Performance

Very Weak

Over the last 90 days AMREP has generated negative risk-adjusted returns adding no value to investors with long positions. Even with weak performance in the last few months, the Stock's basic indicators remain relatively invariable which may send shares a bit higher in March 2025. The latest agitation may also be a sign of long-running up-swing for the enterprise retail investors.

Genpact Limited

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Genpact Limited are ranked lower than 16 (%) of all global equities and portfolios over the last 90 days. Despite nearly uncertain technical and fundamental indicators, Genpact reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with AMREP and Genpact

The main advantage of trading using opposite AMREP and Genpact positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if AMREP 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.

The idea behind AMREP and Genpact Limited 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 Portfolio Comparator module to compare the composition, asset allocations and performance of any two portfolios in your account.