Correlation Between Genpact and Bitcoin Depot

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

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

Diversification Opportunities for Genpact and Bitcoin Depot

-0.75

Correlation Coefficient

Genpact  Bitcoin Depot

Pay attention - limited upside

The 3 months correlation between Genpact and Bitcoin is -0.75. Overlapping area represents the amount of risk that can be diversified away by holding Genpact Limited and Bitcoin Depot in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bitcoin Depot 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 Bitcoin Depot. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bitcoin Depot has no effect on the direction of Genpact i.e., Genpact and Bitcoin Depot go up and down completely randomly.

Pair Corralation between Genpact and Bitcoin Depot

Taking into account the 90-day investment horizon Genpact Limited is expected to generate 0.46 times more return on investment than Bitcoin Depot. However, Genpact Limited is 2.19 times less risky than Bitcoin Depot. It trades about 0.16 of its potential returns per unit of risk. Bitcoin Depot is currently generating about -0.01 per unit of risk. If you would invest  4,291  in Genpact Limited on December 27, 2024 and sell it today you would earn a total of  784.00  from holding Genpact Limited or generate 18.27% return on investment over 90 days.

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

Genpact Limited  vs.  Bitcoin Depot

Genpact Limited

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Genpact Limited are ranked lower than 12 (%) 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.

Bitcoin Depot

Risk-Adjusted Performance

Weak

Over the last 90 days Bitcoin Depot has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of very healthy basic indicators, Bitcoin Depot is not utilizing all of its potentials. The current stock price disarray, may contribute to short-term losses for the investors.

Pair Trading with Genpact and Bitcoin Depot

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

The idea behind Genpact Limited and Bitcoin Depot 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.

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 the Portfolio Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.