Correlation Between Fidelity National and Genpact

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

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

Diversification Opportunities for Fidelity National and Genpact

-0.68

Correlation Coefficient

Fidelity National  Genpact

Excellent diversification

The 3 months correlation between Fidelity and Genpact is -0.68. Overlapping area represents the amount of risk that can be diversified away by holding Fidelity National Information and Genpact Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Genpact Limited and Fidelity National 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 Fidelity National Information 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 Fidelity National i.e., Fidelity National and Genpact go up and down completely randomly.

Pair Corralation between Fidelity National and Genpact

Considering the 90-day investment horizon Fidelity National Information is expected to generate 0.99 times more return on investment than Genpact. However, Fidelity National Information is 1.01 times less risky than Genpact. It trades about 0.04 of its potential returns per unit of risk. Genpact Limited is currently generating about 0.03 per unit of risk. If you would invest  5,464  in Fidelity National Information on November 29, 2024 and sell it today you would earn a total of  1,461  from holding Fidelity National Information or generate 26.74% return on investment over 90 days.

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

Fidelity National Information  vs.  Genpact Limited

Fidelity National

Risk-Adjusted Performance

Very Weak

Over the last 90 days Fidelity National Information has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of weak performance in the last few months, the Stock's forward indicators remain comparatively stable which may send shares a bit higher in March 2025. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.

Genpact Limited

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Genpact Limited are ranked lower than 10 (%) 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 Fidelity National and Genpact

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