Correlation Between Seche Environnement and Cognizant Technology
Can any of the company-specific risk be diversified away by investing in both Seche Environnement 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 Seche Environnement and Cognizant Technology into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Seche Environnement SA and Cognizant Technology Solutions, you can compare the effects of market volatilities on Seche Environnement 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 Seche Environnement with a short position of Cognizant Technology. Check out your portfolio center. Please also check ongoing floating volatility patterns of Seche Environnement and Cognizant Technology.
Diversification Opportunities for Seche Environnement and Cognizant Technology
-0.23 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Seche and Cognizant is -0.23. Overlapping area represents the amount of risk that can be diversified away by holding Seche Environnement SA and Cognizant Technology Solutions in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cognizant Technology and Seche Environnement 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 Seche Environnement SA 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 Seche Environnement i.e., Seche Environnement and Cognizant Technology go up and down completely randomly.
Pair Corralation between Seche Environnement and Cognizant Technology
Assuming the 90 days trading horizon Seche Environnement SA is expected to generate 1.98 times more return on investment than Cognizant Technology. However, Seche Environnement is 1.98 times more volatile than Cognizant Technology Solutions. It trades about 0.0 of its potential returns per unit of risk. Cognizant Technology Solutions is currently generating about -0.3 per unit of risk. If you would invest 7,850 in Seche Environnement SA on October 13, 2024 and sell it today you would lose (40.00) from holding Seche Environnement SA or give up 0.51% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 95.24% |
| Values | Daily Returns |
Seche Environnement SA vs. Cognizant Technology Solutions
Performance |
| Timeline |
| Seche Environnement |
| Cognizant Technology |
Seche Environnement and Cognizant Technology Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Seche Environnement and Cognizant Technology
The main advantage of trading using opposite Seche Environnement and Cognizant Technology positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Seche Environnement 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.| Seche Environnement vs. Moneta Money Bank | Seche Environnement vs. Raymond James Financial | Seche Environnement vs. Zoom Video Communications | Seche Environnement vs. Discover Financial Services |
| Cognizant Technology vs. Playtech Plc | Cognizant Technology vs. JD Sports Fashion | Cognizant Technology vs. Seche Environnement SA | Cognizant Technology vs. Zoom Video Communications |
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 Bond Analysis module to evaluate and analyze corporate bonds as a potential investment for your portfolios..
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