Correlation Between Genpact and United Maritime

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

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

Diversification Opportunities for Genpact and United Maritime

0.19

Correlation Coefficient

Genpact  United Maritime

Average diversification

The 3 months correlation between Genpact and United is 0.19. Overlapping area represents the amount of risk that can be diversified away by holding Genpact Limited and United Maritime in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on United Maritime 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 United Maritime. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of United Maritime has no effect on the direction of Genpact i.e., Genpact and United Maritime go up and down completely randomly.

Pair Corralation between Genpact and United Maritime

Taking into account the 90-day investment horizon Genpact Limited is expected to generate 0.62 times more return on investment than United Maritime. However, Genpact Limited is 1.61 times less risky than United Maritime. It trades about 0.15 of its potential returns per unit of risk. United Maritime is currently generating about -0.03 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	Insignificant
Accuracy	100.0%
Values	Daily Returns

Genpact Limited  vs.  United Maritime

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.

United Maritime

Risk-Adjusted Performance

Very Weak

Over the last 90 days United Maritime has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest uncertain performance, the Stock's technical and fundamental indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the company investors.

Pair Trading with Genpact and United Maritime

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

The idea behind Genpact Limited and United Maritime 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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.