Correlation Between Cognizant Technology and Leroy Seafood
Can any of the company-specific risk be diversified away by investing in both Cognizant Technology and Leroy Seafood 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 Leroy Seafood 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 Leroy Seafood Group, you can compare the effects of market volatilities on Cognizant Technology and Leroy Seafood 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 Leroy Seafood. Check out your portfolio center. Please also check ongoing floating volatility patterns of Cognizant Technology and Leroy Seafood.
Diversification Opportunities for Cognizant Technology and Leroy Seafood
0.13 | Correlation Coefficient |
Average diversification
The 3 months correlation between Cognizant and Leroy is 0.13. Overlapping area represents the amount of risk that can be diversified away by holding Cognizant Technology Solutions and Leroy Seafood Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Leroy Seafood Group 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 Leroy Seafood. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Leroy Seafood Group has no effect on the direction of Cognizant Technology i.e., Cognizant Technology and Leroy Seafood go up and down completely randomly.
Pair Corralation between Cognizant Technology and Leroy Seafood
Assuming the 90 days trading horizon Cognizant Technology Solutions is expected to generate 0.78 times more return on investment than Leroy Seafood. However, Cognizant Technology Solutions is 1.28 times less risky than Leroy Seafood. It trades about 0.06 of its potential returns per unit of risk. Leroy Seafood Group is currently generating about 0.03 per unit of risk. If you would invest 6,089 in Cognizant Technology Solutions on August 31, 2024 and sell it today you would earn a total of 1,991 from holding Cognizant Technology Solutions or generate 32.7% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 98.94% |
| Values | Daily Returns |
Cognizant Technology Solutions vs. Leroy Seafood Group
Performance |
| Timeline |
| Cognizant Technology |
| Leroy Seafood Group |
Cognizant Technology and Leroy Seafood Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Cognizant Technology and Leroy Seafood
The main advantage of trading using opposite Cognizant Technology and Leroy Seafood positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Cognizant Technology position performs unexpectedly, Leroy Seafood 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 Leroy Seafood will offset losses from the drop in Leroy Seafood's long position.| Cognizant Technology vs. Neometals | Cognizant Technology vs. Coor Service Management | Cognizant Technology vs. Aeorema Communications Plc | Cognizant Technology vs. JLEN Environmental Assets |
| Leroy Seafood vs. Neometals | Leroy Seafood vs. Coor Service Management | Leroy Seafood vs. Aeorema Communications Plc | Leroy Seafood vs. JLEN Environmental Assets |
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 Sign In To Macroaxis module to sign in to explore Macroaxis' wealth optimization platform and fintech modules.
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