Correlation Between Cognizant Technology and Solstad Offshore
Can any of the company-specific risk be diversified away by investing in both Cognizant Technology and Solstad Offshore 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 Cognizant Technology and Solstad Offshore into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Cognizant Technology Solutions and Solstad Offshore ASA, you can compare the effects of market volatilities on Cognizant Technology and Solstad Offshore 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 Cognizant Technology with a short position of Solstad Offshore. Check out your portfolio center. Please also check ongoing floating volatility patterns of Cognizant Technology and Solstad Offshore.
Diversification Opportunities for Cognizant Technology and Solstad Offshore
0.08 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Cognizant and Solstad is 0.08. Overlapping area represents the amount of risk that can be diversified away by holding Cognizant Technology Solutions and Solstad Offshore ASA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Solstad Offshore ASA and Cognizant Technology 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 Cognizant Technology Solutions are associated (or correlated) with Solstad Offshore. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Solstad Offshore ASA has no effect on the direction of Cognizant Technology i.e., Cognizant Technology and Solstad Offshore go up and down completely randomly.
Pair Corralation between Cognizant Technology and Solstad Offshore
Assuming the 90 days trading horizon Cognizant Technology is expected to generate 2.57 times less return on investment than Solstad Offshore. But when comparing it to its historical volatility, Cognizant Technology Solutions is 2.85 times less risky than Solstad Offshore. It trades about 0.07 of its potential returns per unit of risk. Solstad Offshore ASA is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest 3,752 in Solstad Offshore ASA on August 28, 2024 and sell it today you would earn a total of 446.00 from holding Solstad Offshore ASA or generate 11.89% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Cognizant Technology Solutions vs. Solstad Offshore ASA
Performance |
| Timeline |
| Cognizant Technology |
| Solstad Offshore ASA |
Cognizant Technology and Solstad Offshore Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Cognizant Technology and Solstad Offshore
The main advantage of trading using opposite Cognizant Technology and Solstad Offshore positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Cognizant Technology position performs unexpectedly, Solstad Offshore 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 Solstad Offshore will offset losses from the drop in Solstad Offshore's long position.| Cognizant Technology vs. Samsung Electronics Co | Cognizant Technology vs. Samsung Electronics Co | Cognizant Technology vs. Hyundai Motor | Cognizant Technology vs. Toyota Motor Corp |
| Solstad Offshore vs. Samsung Electronics Co | Solstad Offshore vs. Samsung Electronics Co | Solstad Offshore vs. Hyundai Motor | Solstad Offshore vs. Toyota Motor Corp |
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 Crypto Correlations module to use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins.
Other Complementary Tools
| Global Correlations Find global opportunities by holding instruments from different markets | |
| Price Ceiling Movement Calculate and plot Price Ceiling Movement for different equity instruments | |
| Portfolio Anywhere Track or share privately all of your investments from the convenience of any device | |
| Piotroski F Score Get Piotroski F Score based on the binary analysis strategy of nine different fundamentals | |
| ETFs Find actively traded Exchange Traded Funds (ETF) from around the world |