Correlation Between Cognizant Technology and Gruppo MutuiOnline
Can any of the company-specific risk be diversified away by investing in both Cognizant Technology and Gruppo MutuiOnline 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 Gruppo MutuiOnline 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 Gruppo MutuiOnline SpA, you can compare the effects of market volatilities on Cognizant Technology and Gruppo MutuiOnline 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 Gruppo MutuiOnline. Check out your portfolio center. Please also check ongoing floating volatility patterns of Cognizant Technology and Gruppo MutuiOnline.
Diversification Opportunities for Cognizant Technology and Gruppo MutuiOnline
-0.39 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Cognizant and Gruppo is -0.39. Overlapping area represents the amount of risk that can be diversified away by holding Cognizant Technology Solutions and Gruppo MutuiOnline SpA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Gruppo MutuiOnline SpA 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 Gruppo MutuiOnline. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Gruppo MutuiOnline SpA has no effect on the direction of Cognizant Technology i.e., Cognizant Technology and Gruppo MutuiOnline go up and down completely randomly.
Pair Corralation between Cognizant Technology and Gruppo MutuiOnline
Assuming the 90 days trading horizon Cognizant Technology is expected to generate 1.41 times less return on investment than Gruppo MutuiOnline. But when comparing it to its historical volatility, Cognizant Technology Solutions is 2.6 times less risky than Gruppo MutuiOnline. It trades about 0.46 of its potential returns per unit of risk. Gruppo MutuiOnline SpA is currently generating about 0.25 of returns per unit of risk over similar time horizon. If you would invest 3,625 in Gruppo MutuiOnline SpA on November 7, 2024 and sell it today you would earn a total of 165.00 from holding Gruppo MutuiOnline SpA or generate 4.55% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 39.13% |
| Values | Daily Returns |
Cognizant Technology Solutions vs. Gruppo MutuiOnline SpA
Performance |
| Timeline |
| Cognizant Technology |
| Gruppo MutuiOnline SpA |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
OK
Cognizant Technology and Gruppo MutuiOnline Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Cognizant Technology and Gruppo MutuiOnline
The main advantage of trading using opposite Cognizant Technology and Gruppo MutuiOnline positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Cognizant Technology position performs unexpectedly, Gruppo MutuiOnline 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 Gruppo MutuiOnline will offset losses from the drop in Gruppo MutuiOnline's long position.| Cognizant Technology vs. Infrastrutture Wireless Italiane | Cognizant Technology vs. Molson Coors Beverage | Cognizant Technology vs. Tyson Foods Cl | Cognizant Technology vs. LPKF Laser Electronics |
| Gruppo MutuiOnline vs. Universal Display Corp | Gruppo MutuiOnline vs. Universal Music Group | Gruppo MutuiOnline vs. Batm Advanced Communications | Gruppo MutuiOnline vs. Infrastrutture Wireless Italiane |
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 Suggestion module to get suggestions outside of your existing asset allocation including your own model portfolios.
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