Correlation Between POSaBIT Systems and Genpact

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

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

Diversification Opportunities for POSaBIT Systems and Genpact

-0.5

Correlation Coefficient

POSaBIT Systems  Genpact

Very good diversification

The 3 months correlation between POSaBIT and Genpact is -0.5. Overlapping area represents the amount of risk that can be diversified away by holding POSaBIT Systems Corp and Genpact Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Genpact Limited and POSaBIT Systems 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 POSaBIT Systems 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 POSaBIT Systems i.e., POSaBIT Systems and Genpact go up and down completely randomly.

Pair Corralation between POSaBIT Systems and Genpact

Assuming the 90 days horizon POSaBIT Systems Corp is expected to under-perform the Genpact. In addition to that, POSaBIT Systems is 4.93 times more volatile than Genpact Limited. It trades about -0.02 of its total potential returns per unit of risk. Genpact Limited is currently generating about 0.0 per unit of volatility. If you would invest  4,628  in Genpact Limited on October 4, 2024 and sell it today you would lose (333.00) from holding Genpact Limited or give up 7.2% of portfolio value over 90 days.

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

POSaBIT Systems Corp  vs.  Genpact Limited

POSaBIT Systems Corp

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days POSaBIT Systems Corp 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 basic indicators remain nearly stable which may send shares a bit higher in February 2025. The current disturbance may also be a sign of long-run up-swing for the company stockholders.

Genpact Limited

Risk-Adjusted Performance

6 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Genpact Limited are ranked lower than 6 (%) 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 POSaBIT Systems and Genpact

The main advantage of trading using opposite POSaBIT Systems and Genpact positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if POSaBIT Systems 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 POSaBIT Systems 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 Balance Of Power module to check stock momentum by analyzing Balance Of Power indicator and other technical ratios.