Correlation Between CompuGroup Medical and Cognizant Technology
Can any of the company-specific risk be diversified away by investing in both CompuGroup Medical and Cognizant Technology 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 CompuGroup Medical and Cognizant Technology into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between CompuGroup Medical AG and Cognizant Technology Solutions, you can compare the effects of market volatilities on CompuGroup Medical and Cognizant Technology 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 CompuGroup Medical with a short position of Cognizant Technology. Check out your portfolio center. Please also check ongoing floating volatility patterns of CompuGroup Medical and Cognizant Technology.
Diversification Opportunities for CompuGroup Medical and Cognizant Technology
0.49 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between CompuGroup and Cognizant is 0.49. Overlapping area represents the amount of risk that can be diversified away by holding CompuGroup Medical AG and Cognizant Technology Solutions in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cognizant Technology and CompuGroup Medical 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 CompuGroup Medical AG are associated (or correlated) with Cognizant Technology. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Cognizant Technology has no effect on the direction of CompuGroup Medical i.e., CompuGroup Medical and Cognizant Technology go up and down completely randomly.
Pair Corralation between CompuGroup Medical and Cognizant Technology
Assuming the 90 days trading horizon CompuGroup Medical AG is expected to generate 1.29 times more return on investment than Cognizant Technology. However, CompuGroup Medical is 1.29 times more volatile than Cognizant Technology Solutions. It trades about 0.2 of its potential returns per unit of risk. Cognizant Technology Solutions is currently generating about 0.16 per unit of risk. If you would invest 1,411 in CompuGroup Medical AG on August 30, 2024 and sell it today you would earn a total of 149.00 from holding CompuGroup Medical AG or generate 10.56% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
CompuGroup Medical AG vs. Cognizant Technology Solutions
Performance |
| Timeline |
| CompuGroup Medical |
| Cognizant Technology |
CompuGroup Medical and Cognizant Technology Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with CompuGroup Medical and Cognizant Technology
The main advantage of trading using opposite CompuGroup Medical and Cognizant Technology positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CompuGroup Medical position performs unexpectedly, Cognizant Technology 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 Cognizant Technology will offset losses from the drop in Cognizant Technology's long position.| CompuGroup Medical vs. Lendinvest PLC | CompuGroup Medical vs. Neometals | CompuGroup Medical vs. Albion Technology General | CompuGroup Medical vs. Jupiter Fund Management |
| Cognizant Technology vs. Lendinvest PLC | Cognizant Technology vs. Neometals | Cognizant Technology vs. Albion Technology General | Cognizant Technology vs. Jupiter Fund Management |
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 Portfolio Dashboard module to portfolio dashboard that provides centralized access to all your investments.
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