Correlation Between Genpact and Franklin Covey

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

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

Diversification Opportunities for Genpact and Franklin Covey

-0.74

Correlation Coefficient

Genpact  Franklin Covey

Pay attention - limited upside

The 3 months correlation between Genpact and Franklin is -0.74. Overlapping area represents the amount of risk that can be diversified away by holding Genpact Limited and Franklin Covey in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Franklin Covey 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 Franklin Covey. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Franklin Covey has no effect on the direction of Genpact i.e., Genpact and Franklin Covey go up and down completely randomly.

Pair Corralation between Genpact and Franklin Covey

Taking into account the 90-day investment horizon Genpact Limited is expected to generate 0.95 times more return on investment than Franklin Covey. However, Genpact Limited is 1.05 times less risky than Franklin Covey. It trades about 0.19 of its potential returns per unit of risk. Franklin Covey is currently generating about -0.01 per unit of risk. If you would invest  3,219  in Genpact Limited on September 5, 2024 and sell it today you would earn a total of  1,346  from holding Genpact Limited or generate 41.81% 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.  Franklin Covey

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.

Franklin Covey

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Franklin Covey has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest inconsistent performance, the Stock's fundamental indicators remain sound and the latest tumult on Wall Street may also be a sign of longer-term gains for the firm shareholders.

Pair Trading with Genpact and Franklin Covey

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

The idea behind Genpact Limited and Franklin Covey 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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..