Correlation Between Cognizant Technology and National Bank
Can any of the company-specific risk be diversified away by investing in both Cognizant Technology and National Bank 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 National Bank 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 National Bank of, you can compare the effects of market volatilities on Cognizant Technology and National Bank 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 National Bank. Check out your portfolio center. Please also check ongoing floating volatility patterns of Cognizant Technology and National Bank.
Diversification Opportunities for Cognizant Technology and National Bank
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Cognizant and National is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Cognizant Technology Solutions and National Bank of in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on National 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 National Bank. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of National Bank has no effect on the direction of Cognizant Technology i.e., Cognizant Technology and National Bank go up and down completely randomly.
Pair Corralation between Cognizant Technology and National Bank
Assuming the 90 days trading horizon Cognizant Technology Solutions is expected to generate 1.39 times more return on investment than National Bank. However, Cognizant Technology is 1.39 times more volatile than National Bank of. It trades about 0.07 of its potential returns per unit of risk. National Bank of is currently generating about 0.06 per unit of risk. If you would invest 6,479 in Cognizant Technology Solutions on September 1, 2024 and sell it today you would earn a total of 1,601 from holding Cognizant Technology Solutions or generate 24.71% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 98.9% |
| Values | Daily Returns |
Cognizant Technology Solutions vs. National Bank of
Performance |
| Timeline |
| Cognizant Technology |
| National Bank |
Cognizant Technology and National Bank Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Cognizant Technology and National Bank
The main advantage of trading using opposite Cognizant Technology and National Bank positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Cognizant Technology position performs unexpectedly, National Bank 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 National Bank will offset losses from the drop in National Bank's long position.| Cognizant Technology vs. Herald Investment Trust | Cognizant Technology vs. Applied Materials | Cognizant Technology vs. Compagnie Plastic Omnium | Cognizant Technology vs. Cizzle Biotechnology Holdings |
| National Bank vs. Extra Space Storage | National Bank vs. Public Storage | National Bank vs. Datagroup SE | National Bank vs. Charter Communications Cl |
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 Earnings Calls module to check upcoming earnings announcements updated hourly across public exchanges.
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