Correlation Between Lightbridge Corp and Genpact

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

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

Diversification Opportunities for Lightbridge Corp and Genpact

-0.05

Correlation Coefficient

Lightbridge Corp  Genpact

Good diversification

The 3 months correlation between Lightbridge and Genpact is -0.05. Overlapping area represents the amount of risk that can be diversified away by holding Lightbridge Corp and Genpact Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Genpact Limited and Lightbridge Corp 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 Lightbridge Corp 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 Lightbridge Corp i.e., Lightbridge Corp and Genpact go up and down completely randomly.

Pair Corralation between Lightbridge Corp and Genpact

Given the investment horizon of 90 days Lightbridge Corp is expected to generate 8.19 times more return on investment than Genpact. However, Lightbridge Corp is 8.19 times more volatile than Genpact Limited. It trades about 0.12 of its potential returns per unit of risk. Genpact Limited is currently generating about 0.1 per unit of risk. If you would invest  359.00  in Lightbridge Corp on October 15, 2024 and sell it today you would earn a total of  239.00  from holding Lightbridge Corp or generate 66.57% return on investment over 90 days.

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

Lightbridge Corp  vs.  Genpact Limited

Lightbridge Corp

Risk-Adjusted Performance

9 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Lightbridge Corp are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. Even with relatively inconsistent fundamental drivers, Lightbridge Corp reported solid returns over the last few months and may actually be approaching a breakup point.

Genpact Limited

Risk-Adjusted Performance

8 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Genpact Limited are ranked lower than 8 (%) 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 February 2025.

Pair Trading with Lightbridge Corp and Genpact

The main advantage of trading using opposite Lightbridge Corp and Genpact positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lightbridge Corp 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 Lightbridge Corp 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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.