Correlation Between Genpact and VCI Global

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

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

Diversification Opportunities for Genpact and VCI Global

-0.72

Correlation Coefficient

Genpact  VCI Global

Pay attention - limited upside

The 3 months correlation between Genpact and VCI is -0.72. Overlapping area represents the amount of risk that can be diversified away by holding Genpact Limited and VCI Global Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on VCI Global Limited 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 VCI Global. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of VCI Global Limited has no effect on the direction of Genpact i.e., Genpact and VCI Global go up and down completely randomly.

Pair Corralation between Genpact and VCI Global

Taking into account the 90-day investment horizon Genpact is expected to generate 124.05 times less return on investment than VCI Global. But when comparing it to its historical volatility, Genpact Limited is 18.09 times less risky than VCI Global. It trades about 0.0 of its potential returns per unit of risk. VCI Global Limited is currently generating about 0.02 of returns per unit of risk over similar time horizon. If you would invest  20,824  in VCI Global Limited on September 28, 2024 and sell it today you would lose (20,637) from holding VCI Global Limited or give up 99.1% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Weak
Accuracy	86.87%
Values	Daily Returns

Genpact Limited  vs.  VCI Global Limited

Genpact Limited

Risk-Adjusted Performance

7 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Genpact Limited are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. Despite nearly weak technical and fundamental indicators, Genpact may actually be approaching a critical reversion point that can send shares even higher in January 2025.

VCI Global Limited

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days VCI Global Limited has generated negative risk-adjusted returns adding no value to investors with long positions. Despite fragile performance in the last few months, the Stock's forward indicators remain nearly stable which may send shares a bit higher in January 2025. The current disturbance may also be a sign of long-run up-swing for the company stockholders.

Pair Trading with Genpact and VCI Global

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

The idea behind Genpact Limited and VCI Global Limited 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 Money Flow Index module to determine momentum by analyzing Money Flow Index and other technical indicators.