Correlation Between Hackett and Genpact

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

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

Diversification Opportunities for Hackett and Genpact

0.06

Correlation Coefficient

Hackett  Genpact

Significant diversification

The 3 months correlation between Hackett and Genpact is 0.06. Overlapping area represents the amount of risk that can be diversified away by holding The Hackett Group and Genpact Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Genpact Limited and Hackett 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 The Hackett Group are associated (or correlated) with Genpact. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Genpact Limited has no effect on the direction of Hackett i.e., Hackett and Genpact go up and down completely randomly.

Pair Corralation between Hackett and Genpact

Given the investment horizon of 90 days The Hackett Group is expected to under-perform the Genpact. But the stock apears to be less risky and, when comparing its historical volatility, The Hackett Group is 1.71 times less risky than Genpact. The stock trades about -0.07 of its potential returns per unit of risk. The Genpact Limited is currently generating about 0.15 of returns per unit of risk over similar time horizon. If you would invest  4,264  in Genpact Limited on December 28, 2024 and sell it today you would earn a total of  736.00  from holding Genpact Limited or generate 17.26% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

The Hackett Group  vs.  Genpact Limited

Hackett Group

Risk-Adjusted Performance

Very Weak

Over the last 90 days The Hackett Group has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable forward-looking signals, Hackett is not utilizing all of its potentials. The recent stock price uproar, may contribute to short-horizon losses for the private investors.

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.

Pair Trading with Hackett and Genpact

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

The idea behind The Hackett Group and Genpact 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.

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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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.