Correlation Between Genpact and Fidelity Advisor

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

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

Diversification Opportunities for Genpact and Fidelity Advisor

0.78

Correlation Coefficient

Genpact  Fidelity Advisor

Poor diversification

The 3 months correlation between Genpact and Fidelity is 0.78. Overlapping area represents the amount of risk that can be diversified away by holding Genpact Limited and Fidelity Advisor Industrials in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fidelity Advisor Ind 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 Fidelity Advisor. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Fidelity Advisor Ind has no effect on the direction of Genpact i.e., Genpact and Fidelity Advisor go up and down completely randomly.

Pair Corralation between Genpact and Fidelity Advisor

Taking into account the 90-day investment horizon Genpact Limited is expected to generate 1.57 times more return on investment than Fidelity Advisor. However, Genpact is 1.57 times more volatile than Fidelity Advisor Industrials. It trades about 0.18 of its potential returns per unit of risk. Fidelity Advisor Industrials is currently generating about 0.23 per unit of risk. If you would invest  3,805  in Genpact Limited on September 5, 2024 and sell it today you would earn a total of  760.00  from holding Genpact Limited or generate 19.97% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	98.44%
Values	Daily Returns

Genpact Limited  vs.  Fidelity Advisor Industrials

Genpact Limited

Risk-Adjusted Performance

14 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Genpact Limited are ranked lower than 14 (%) of all global equities and portfolios over the last 90 days. Despite nearly unfluctuating technical and fundamental indicators, Genpact reported solid returns over the last few months and may actually be approaching a breakup point.

Fidelity Advisor Ind

Risk-Adjusted Performance

18 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Fidelity Advisor Industrials are ranked lower than 18 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly weak fundamental indicators, Fidelity Advisor showed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Genpact and Fidelity Advisor

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

The idea behind Genpact Limited and Fidelity Advisor Industrials 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 Managers module to screen money managers from public funds and ETFs managed around the world.