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
0.9 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Genpact and Nomura is 0.9. 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 0.98 times more return on investment than Nomura Research. However, Genpact Limited is 1.02 times less risky than Nomura Research. It trades about 0.07 of its potential returns per unit of risk. Nomura Research Institute is currently generating about 0.04 per unit of risk. If you would invest 3,591 in Genpact Limited on December 5, 2024 and sell it today you would earn a total of 1,682 from holding Genpact Limited or generate 46.84% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Very Strong |
Accuracy | 100.0% |
Values | Daily Returns |
Genpact Limited vs. Nomura Research Institute
Performance |
Timeline |
Genpact Limited |
Nomura Research Institute |
Genpact and Nomura Research Volatility Contrast
Predicted Return Density |
Returns |
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.Genpact vs. WNS Holdings | Genpact vs. ASGN Inc | Genpact vs. CACI International | Genpact vs. ExlService Holdings |
Nomura Research vs. The Hackett Group | Nomura Research vs. Genpact Limited | Nomura Research vs. Grid Dynamics Holdings | Nomura Research vs. ASGN Inc |
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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.
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