Correlation Between Genpact and ManpowerGroup

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

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

Diversification Opportunities for Genpact and ManpowerGroup

-0.54

Correlation Coefficient

Genpact  ManpowerGroup

Excellent diversification

The 3 months correlation between Genpact and ManpowerGroup is -0.54. Overlapping area represents the amount of risk that can be diversified away by holding Genpact Limited and ManpowerGroup in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ManpowerGroup 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 ManpowerGroup. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ManpowerGroup has no effect on the direction of Genpact i.e., Genpact and ManpowerGroup go up and down completely randomly.

Pair Corralation between Genpact and ManpowerGroup

Taking into account the 90-day investment horizon Genpact Limited is expected to generate 0.83 times more return on investment than ManpowerGroup. However, Genpact Limited is 1.21 times less risky than ManpowerGroup. It trades about 0.18 of its potential returns per unit of risk. ManpowerGroup is currently generating about -0.08 per unit of risk. If you would invest  3,859  in Genpact Limited on September 1, 2024 and sell it today you would earn a total of  757.00  from holding Genpact Limited or generate 19.62% return on investment over 90 days.

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

Genpact Limited  vs.  ManpowerGroup

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 uncertain technical and fundamental indicators, Genpact reported solid returns over the last few months and may actually be approaching a breakup point.

ManpowerGroup

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days ManpowerGroup has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest unsteady performance, the Stock's basic indicators remain healthy and the recent disarray on Wall Street may also be a sign of long period gains for the firm investors.

Pair Trading with Genpact and ManpowerGroup

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

The idea behind Genpact Limited and ManpowerGroup 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 CEOs Directory module to screen CEOs from public companies around the world.