Correlation Between Genpact and Ampco Pittsburgh

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

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

Diversification Opportunities for Genpact and Ampco Pittsburgh

0.08

Correlation Coefficient

Genpact  Ampco Pittsburgh

Significant diversification

The 3 months correlation between Genpact and Ampco is 0.08. Overlapping area represents the amount of risk that can be diversified away by holding Genpact Limited and Ampco Pittsburgh in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ampco Pittsburgh 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 Ampco Pittsburgh. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ampco Pittsburgh has no effect on the direction of Genpact i.e., Genpact and Ampco Pittsburgh go up and down completely randomly.

Pair Corralation between Genpact and Ampco Pittsburgh

Taking into account the 90-day investment horizon Genpact Limited is expected to under-perform the Ampco Pittsburgh. But the stock apears to be less risky and, when comparing its historical volatility, Genpact Limited is 4.86 times less risky than Ampco Pittsburgh. The stock trades about -0.1 of its potential returns per unit of risk. The Ampco Pittsburgh is currently generating about 0.16 of returns per unit of risk over similar time horizon. If you would invest  167.00  in Ampco Pittsburgh on September 20, 2024 and sell it today you would earn a total of  25.00  from holding Ampco Pittsburgh or generate 14.97% return on investment over 90 days.

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

Genpact Limited  vs.  Ampco Pittsburgh

Genpact Limited

Risk-Adjusted Performance

9 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Genpact Limited are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. Despite nearly uncertain technical and fundamental indicators, Genpact may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Ampco Pittsburgh

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Ampco Pittsburgh has generated negative risk-adjusted returns adding no value to investors with long positions. Even with relatively invariable basic indicators, Ampco Pittsburgh is not utilizing all of its potentials. The current stock price agitation, may contribute to short-term losses for the retail investors.

Pair Trading with Genpact and Ampco Pittsburgh

The main advantage of trading using opposite Genpact and Ampco Pittsburgh positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Genpact position performs unexpectedly, Ampco Pittsburgh 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 Ampco Pittsburgh will offset losses from the drop in Ampco Pittsburgh's long position.

The idea behind Genpact Limited and Ampco Pittsburgh 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 Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.