Correlation Between Bitcoin Depot and Genpact

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

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

Diversification Opportunities for Bitcoin Depot and Genpact

0.85

Correlation Coefficient

Bitcoin Depot  Genpact

Very poor diversification

The 3 months correlation between Bitcoin and Genpact is 0.85. Overlapping area represents the amount of risk that can be diversified away by holding Bitcoin Depot and Genpact Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Genpact Limited and Bitcoin Depot 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 Bitcoin Depot 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 Bitcoin Depot i.e., Bitcoin Depot and Genpact go up and down completely randomly.

Pair Corralation between Bitcoin Depot and Genpact

Considering the 90-day investment horizon Bitcoin Depot is expected to under-perform the Genpact. In addition to that, Bitcoin Depot is 3.54 times more volatile than Genpact Limited. It trades about -0.03 of its total potential returns per unit of risk. Genpact Limited is currently generating about 0.01 per unit of volatility. If you would invest  4,319  in Genpact Limited on September 5, 2024 and sell it today you would earn a total of  246.00  from holding Genpact Limited or generate 5.7% return on investment over 90 days.

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

Bitcoin Depot  vs.  Genpact Limited

Bitcoin Depot

Risk-Adjusted Performance

3 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Bitcoin Depot are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. In spite of very fragile basic indicators, Bitcoin Depot displayed solid returns over the last few months and may actually be approaching a breakup point.

Genpact Limited

Risk-Adjusted Performance

14 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Genpact Limited are ranked lower than 14 (%) of all global equities and portfolios over the last 90 days. Despite nearly unfluctuating technical and fundamental indicators, Genpact reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Bitcoin Depot and Genpact

The main advantage of trading using opposite Bitcoin Depot and Genpact positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bitcoin Depot 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 Bitcoin Depot 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 Money Managers module to screen money managers from public funds and ETFs managed around the world.