Correlation Between Leidos Holdings and Genpact

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

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

Diversification Opportunities for Leidos Holdings and Genpact

-0.76

Correlation Coefficient

Leidos Holdings  Genpact

Pay attention - limited upside

The 3 months correlation between Leidos and Genpact is -0.76. Overlapping area represents the amount of risk that can be diversified away by holding Leidos Holdings and Genpact Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Genpact Limited and Leidos 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 Leidos 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 Leidos Holdings i.e., Leidos Holdings and Genpact go up and down completely randomly.

Pair Corralation between Leidos Holdings and Genpact

Given the investment horizon of 90 days Leidos Holdings is expected to generate 0.86 times more return on investment than Genpact. However, Leidos Holdings is 1.16 times less risky than Genpact. It trades about 0.08 of its potential returns per unit of risk. Genpact Limited is currently generating about 0.03 per unit of risk. If you would invest  8,194  in Leidos Holdings on March 3, 2025 and sell it today you would earn a total of  6,658  from holding Leidos Holdings or generate 81.25% return on investment over 90 days.

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

Leidos Holdings  vs.  Genpact Limited

Leidos Holdings

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Leidos Holdings are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively inconsistent basic indicators, Leidos Holdings unveiled solid returns over the last few months and may actually be approaching a breakup point.

Genpact Limited

Risk-Adjusted Performance

Very Weak

Over the last 90 days Genpact Limited has generated negative risk-adjusted returns adding no value to investors with long positions. Despite uncertain performance in the last few months, the Stock's technical and fundamental indicators remain nearly stable which may send shares a bit higher in July 2025. The current disturbance may also be a sign of long-run up-swing for the company stockholders.

Pair Trading with Leidos Holdings and Genpact

The main advantage of trading using opposite Leidos Holdings and Genpact positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Leidos 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 Leidos 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.

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 Investing Opportunities module to build portfolios using our predefined set of ideas and optimize them against your investing preferences.