Correlation Between Cognizant Technology and Aptitude Software
Can any of the company-specific risk be diversified away by investing in both Cognizant Technology and Aptitude Software 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 Aptitude Software 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 Aptitude Software Group, you can compare the effects of market volatilities on Cognizant Technology and Aptitude Software 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 Aptitude Software. Check out your portfolio center. Please also check ongoing floating volatility patterns of Cognizant Technology and Aptitude Software.
Diversification Opportunities for Cognizant Technology and Aptitude Software
-0.22 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Cognizant and Aptitude is -0.22. Overlapping area represents the amount of risk that can be diversified away by holding Cognizant Technology Solutions and Aptitude Software Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Aptitude Software 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 Aptitude Software. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Aptitude Software has no effect on the direction of Cognizant Technology i.e., Cognizant Technology and Aptitude Software go up and down completely randomly.
Pair Corralation between Cognizant Technology and Aptitude Software
Assuming the 90 days trading horizon Cognizant Technology Solutions is expected to generate 0.6 times more return on investment than Aptitude Software. However, Cognizant Technology Solutions is 1.66 times less risky than Aptitude Software. It trades about 0.04 of its potential returns per unit of risk. Aptitude Software Group is currently generating about 0.01 per unit of risk. If you would invest 6,029 in Cognizant Technology Solutions on October 11, 2024 and sell it today you would earn a total of 1,499 from holding Cognizant Technology Solutions or generate 24.86% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 99.4% |
| Values | Daily Returns |
Cognizant Technology Solutions vs. Aptitude Software Group
Performance |
| Timeline |
| Cognizant Technology |
| Aptitude Software |
Cognizant Technology and Aptitude Software Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Cognizant Technology and Aptitude Software
The main advantage of trading using opposite Cognizant Technology and Aptitude Software positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Cognizant Technology position performs unexpectedly, Aptitude Software 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 Aptitude Software will offset losses from the drop in Aptitude Software's long position.| Cognizant Technology vs. Atresmedia | Cognizant Technology vs. XLMedia PLC | Cognizant Technology vs. Blackstone Loan Financing | Cognizant Technology vs. G5 Entertainment AB |
| Aptitude Software vs. Axway Software SA | Aptitude Software vs. Pfeiffer Vacuum Technology | Aptitude Software vs. Zegona Communications Plc | Aptitude Software vs. Cognizant Technology Solutions |
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 Stock Tickers module to use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites.
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