Correlation Between FiscalNote Holdings and Genpact

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

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

Diversification Opportunities for FiscalNote Holdings and Genpact

0.69

Correlation Coefficient

FiscalNote Holdings  Genpact

Poor diversification

The 3 months correlation between FiscalNote and Genpact is 0.69. Overlapping area represents the amount of risk that can be diversified away by holding FiscalNote Holdings and Genpact Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Genpact Limited and FiscalNote Holdings 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 FiscalNote Holdings 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 FiscalNote Holdings i.e., FiscalNote Holdings and Genpact go up and down completely randomly.

Pair Corralation between FiscalNote Holdings and Genpact

Given the investment horizon of 90 days FiscalNote Holdings is expected to under-perform the Genpact. In addition to that, FiscalNote Holdings is 4.16 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 -0.05 per unit of volatility. If you would invest  3,595  in Genpact Limited on February 19, 2024 and sell it today you would lose (164.00) from holding Genpact Limited or give up 4.56% of portfolio value over 90 days.

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

FiscalNote Holdings  vs.  Genpact Limited

FiscalNote Holdings

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days FiscalNote Holdings has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest inconsistent performance, the Stock's basic indicators remain sound and the latest tumult on Wall Street may also be a sign of longer-term gains for the firm shareholders.

Genpact Limited

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Genpact Limited has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable technical and fundamental indicators, Genpact is not utilizing all of its potentials. The recent stock price disturbance, may contribute to mid-run losses for the stockholders.

Pair Trading with FiscalNote Holdings and Genpact

The main advantage of trading using opposite FiscalNote Holdings and Genpact positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if FiscalNote Holdings 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 FiscalNote Holdings 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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.