Correlation Between Genpact and Web Global

Can any of the company-specific risk be diversified away by investing in both Genpact and Web 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 Web 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 Web Global Holdings, you can compare the effects of market volatilities on Genpact and Web 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 Web Global. Check out your portfolio center. Please also check ongoing floating volatility patterns of Genpact and Web Global.

Diversification Opportunities for Genpact and Web Global

0.63

Correlation Coefficient

Genpact  Web Global

Poor diversification

The 3 months correlation between Genpact and Web is 0.63. Overlapping area represents the amount of risk that can be diversified away by holding Genpact Limited and Web Global Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Web Global Holdings 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 Web Global. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Web Global Holdings has no effect on the direction of Genpact i.e., Genpact and Web Global go up and down completely randomly.

Pair Corralation between Genpact and Web Global

If you would invest  3,837  in Genpact Limited on September 12, 2024 and sell it today you would earn a total of  673.00  from holding Genpact Limited or generate 17.54% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	1.56%
Values	Daily Returns

Genpact Limited  vs.  Web Global Holdings

Genpact Limited

Risk-Adjusted Performance

12 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Genpact Limited are ranked lower than 12 (%) 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.

Web Global Holdings

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Web Global Holdings has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong fundamental drivers, Web Global is not utilizing all of its potentials. The latest stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Genpact and Web Global

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

The idea behind Genpact Limited and Web Global Holdings 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 Balance Of Power module to check stock momentum by analyzing Balance Of Power indicator and other technical ratios.