Correlation Between Genpact and Oshkosh

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

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

Diversification Opportunities for Genpact and Oshkosh

0.68

Correlation Coefficient

Genpact  Oshkosh

Poor diversification

The 3 months correlation between Genpact and Oshkosh is 0.68. Overlapping area represents the amount of risk that can be diversified away by holding Genpact Limited and Oshkosh in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Oshkosh 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 Oshkosh. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Oshkosh has no effect on the direction of Genpact i.e., Genpact and Oshkosh go up and down completely randomly.

Pair Corralation between Genpact and Oshkosh

Taking into account the 90-day investment horizon Genpact Limited is expected to generate 0.64 times more return on investment than Oshkosh. However, Genpact Limited is 1.57 times less risky than Oshkosh. It trades about 0.17 of its potential returns per unit of risk. Oshkosh is currently generating about 0.02 per unit of risk. If you would invest  4,264  in Genpact Limited on December 28, 2024 and sell it today you would earn a total of  811.00  from holding Genpact Limited or generate 19.02% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	98.36%
Values	Daily Returns

Genpact Limited  vs.  Oshkosh

Genpact Limited

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Genpact Limited are ranked lower than 13 (%) 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.

Oshkosh

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Oshkosh are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. Despite quite persistent basic indicators, Oshkosh is not utilizing all of its potentials. The current stock price mess, may contribute to short-term losses for the institutional investors.

Pair Trading with Genpact and Oshkosh

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

The idea behind Genpact Limited and Oshkosh 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 Global Markets Map module to get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes.