Correlation Between Genpact and Forrester Research

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

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

Diversification Opportunities for Genpact and Forrester Research

0.36

Correlation Coefficient

Genpact  Forrester Research

Weak diversification

The 3 months correlation between Genpact and Forrester is 0.36. Overlapping area represents the amount of risk that can be diversified away by holding Genpact Limited and Forrester Research in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Forrester Research 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 Forrester Research. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Forrester Research has no effect on the direction of Genpact i.e., Genpact and Forrester Research go up and down completely randomly.

Pair Corralation between Genpact and Forrester Research

Taking into account the 90-day investment horizon Genpact Limited is expected to generate 0.68 times more return on investment than Forrester Research. However, Genpact Limited is 1.47 times less risky than Forrester Research. It trades about -0.39 of its potential returns per unit of risk. Forrester Research is currently generating about -0.32 per unit of risk. If you would invest  4,648  in Genpact Limited on September 24, 2024 and sell it today you would lose (360.00) from holding Genpact Limited or give up 7.75% of portfolio value over 90 days.

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

Genpact Limited  vs.  Forrester Research

Genpact Limited

Risk-Adjusted Performance

7 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Genpact Limited are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. Despite nearly weak technical and fundamental indicators, Genpact may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Forrester Research

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Forrester Research has generated negative risk-adjusted returns adding no value to investors with long positions. Even with latest fragile performance, the Stock's basic indicators remain invariable and the latest agitation on Wall Street may also be a sign of long-running gains for the enterprise retail investors.

Pair Trading with Genpact and Forrester Research

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

The idea behind Genpact Limited and Forrester Research 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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.