Correlation Between Cognizant Technology and Cembra Money
Can any of the company-specific risk be diversified away by investing in both Cognizant Technology and Cembra Money 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 Cembra Money 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 Cembra Money Bank, you can compare the effects of market volatilities on Cognizant Technology and Cembra Money 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 Cembra Money. Check out your portfolio center. Please also check ongoing floating volatility patterns of Cognizant Technology and Cembra Money.
Diversification Opportunities for Cognizant Technology and Cembra Money
0.66 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Cognizant and Cembra is 0.66. Overlapping area represents the amount of risk that can be diversified away by holding Cognizant Technology Solutions and Cembra Money Bank in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cembra Money Bank 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 Cembra Money. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Cembra Money Bank has no effect on the direction of Cognizant Technology i.e., Cognizant Technology and Cembra Money go up and down completely randomly.
Pair Corralation between Cognizant Technology and Cembra Money
Assuming the 90 days trading horizon Cognizant Technology is expected to generate 1.19 times less return on investment than Cembra Money. But when comparing it to its historical volatility, Cognizant Technology Solutions is 1.59 times less risky than Cembra Money. It trades about 0.19 of its potential returns per unit of risk. Cembra Money Bank is currently generating about 0.14 of returns per unit of risk over similar time horizon. If you would invest 8,928 in Cembra Money Bank on November 27, 2024 and sell it today you would earn a total of 507.00 from holding Cembra Money Bank or generate 5.68% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Cognizant Technology Solutions vs. Cembra Money Bank
Performance |
| Timeline |
| Cognizant Technology |
| Cembra Money Bank |
Cognizant Technology and Cembra Money Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Cognizant Technology and Cembra Money
The main advantage of trading using opposite Cognizant Technology and Cembra Money positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Cognizant Technology position performs unexpectedly, Cembra Money 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 Cembra Money will offset losses from the drop in Cembra Money's long position.| Cognizant Technology vs. Vietnam Enterprise Investments | Cognizant Technology vs. Eco Animal Health | Cognizant Technology vs. Hansa Investment | Cognizant Technology vs. FC Investment Trust |
| Cembra Money vs. TT Electronics Plc | Cembra Money vs. Blackrock World Mining | Cembra Money vs. Coeur Mining | Cembra Money vs. Hochschild Mining plc |
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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.
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