Correlation Between Genpact and Ryder System

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

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

Diversification Opportunities for Genpact and Ryder System

0.95

Correlation Coefficient

Genpact  Ryder System

Almost no diversification

The 3 months correlation between Genpact and Ryder is 0.95. Overlapping area represents the amount of risk that can be diversified away by holding Genpact Limited and Ryder System in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ryder System 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 Ryder System. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ryder System has no effect on the direction of Genpact i.e., Genpact and Ryder System go up and down completely randomly.

Pair Corralation between Genpact and Ryder System

Taking into account the 90-day investment horizon Genpact Limited is expected to generate 1.06 times more return on investment than Ryder System. However, Genpact is 1.06 times more volatile than Ryder System. It trades about 0.15 of its potential returns per unit of risk. Ryder System is currently generating about 0.14 per unit of risk. If you would invest  3,850  in Genpact Limited on September 20, 2024 and sell it today you would earn a total of  477.00  from holding Genpact Limited or generate 12.39% 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.  Ryder System

Genpact Limited

Risk-Adjusted Performance

9 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Genpact Limited are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. Despite nearly uncertain technical and fundamental indicators, Genpact may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Ryder System

Risk-Adjusted Performance

8 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Ryder System are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. Even with relatively weak basic indicators, Ryder System may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Pair Trading with Genpact and Ryder System

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

The idea behind Genpact Limited and Ryder System 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 Headlines Timeline module to stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity.