Correlation Between Genpact and Nomura Research

Can any of the company-specific risk be diversified away by investing in both Genpact and Nomura 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 Nomura 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 Nomura Research Institute, you can compare the effects of market volatilities on Genpact and Nomura 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 Nomura Research. Check out your portfolio center. Please also check ongoing floating volatility patterns of Genpact and Nomura Research.

Diversification Opportunities for Genpact and Nomura Research

0.82

Correlation Coefficient

Genpact  Nomura Research

Very poor diversification

The 3 months correlation between Genpact and Nomura is 0.82. Overlapping area represents the amount of risk that can be diversified away by holding Genpact Limited and Nomura Research Institute in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nomura Research Institute 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 Nomura Research. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Nomura Research Institute has no effect on the direction of Genpact i.e., Genpact and Nomura Research go up and down completely randomly.

Pair Corralation between Genpact and Nomura Research

Taking into account the 90-day investment horizon Genpact Limited is expected to generate 1.15 times more return on investment than Nomura Research. However, Genpact is 1.15 times more volatile than Nomura Research Institute. It trades about 0.15 of its potential returns per unit of risk. Nomura Research Institute is currently generating about 0.1 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  743.00  from holding Genpact Limited or generate 17.32% return on investment over 90 days.

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

Genpact Limited  vs.  Nomura Research Institute

Genpact Limited

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Genpact Limited are ranked lower than 11 (%) 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.

Nomura Research Institute

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Nomura Research Institute are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. In spite of fairly uncertain essential indicators, Nomura Research may actually be approaching a critical reversion point that can send shares even higher in April 2025.

Pair Trading with Genpact and Nomura Research

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

The idea behind Genpact Limited and Nomura Research Institute 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 Bond Analysis module to evaluate and analyze corporate bonds as a potential investment for your portfolios..