Correlation Between Genpact and Transcat
Can any of the company-specific risk be diversified away by investing in both Genpact and Transcat 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 Transcat into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Genpact Limited and Transcat, you can compare the effects of market volatilities on Genpact and Transcat 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 Transcat. Check out your portfolio center. Please also check ongoing floating volatility patterns of Genpact and Transcat.
Diversification Opportunities for Genpact and Transcat
Excellent diversification
The 3 months correlation between Genpact and Transcat is -0.61. Overlapping area represents the amount of risk that can be diversified away by holding Genpact Limited and Transcat in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Transcat 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 Transcat. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Transcat has no effect on the direction of Genpact i.e., Genpact and Transcat go up and down completely randomly.
Pair Corralation between Genpact and Transcat
Taking into account the 90-day investment horizon Genpact Limited is expected to under-perform the Transcat. But the stock apears to be less risky and, when comparing its historical volatility, Genpact Limited is 1.26 times less risky than Transcat. The stock trades about -0.06 of its potential returns per unit of risk. The Transcat is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest 7,108 in Transcat on March 13, 2025 and sell it today you would earn a total of 382.00 from holding Transcat or generate 5.37% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Genpact Limited vs. Transcat
Performance |
| Timeline |
| Genpact Limited |
| Transcat |
Genpact and Transcat Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Genpact and Transcat
The main advantage of trading using opposite Genpact and Transcat positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Genpact position performs unexpectedly, Transcat 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 Transcat will offset losses from the drop in Transcat's long position.| Genpact vs. WNS Holdings | Genpact vs. ASGN Inc | Genpact vs. CACI International | Genpact vs. ExlService Holdings |
| Transcat vs. BlueLinx Holdings | Transcat vs. SiteOne Landscape Supply | Transcat vs. DXP Enterprises | Transcat vs. Core Main |
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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.
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