Correlation Between Cognizant Technology and Centaur Media
Can any of the company-specific risk be diversified away by investing in both Cognizant Technology and Centaur Media 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 Centaur Media 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 Centaur Media, you can compare the effects of market volatilities on Cognizant Technology and Centaur Media 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 Centaur Media. Check out your portfolio center. Please also check ongoing floating volatility patterns of Cognizant Technology and Centaur Media.
Diversification Opportunities for Cognizant Technology and Centaur Media
-0.45 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Cognizant and Centaur is -0.45. Overlapping area represents the amount of risk that can be diversified away by holding Cognizant Technology Solutions and Centaur Media in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Centaur Media 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 Centaur Media. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Centaur Media has no effect on the direction of Cognizant Technology i.e., Cognizant Technology and Centaur Media go up and down completely randomly.
Pair Corralation between Cognizant Technology and Centaur Media
Assuming the 90 days trading horizon Cognizant Technology Solutions is expected to generate 0.59 times more return on investment than Centaur Media. However, Cognizant Technology Solutions is 1.69 times less risky than Centaur Media. It trades about 0.06 of its potential returns per unit of risk. Centaur Media is currently generating about -0.03 per unit of risk. If you would invest 5,551 in Cognizant Technology Solutions on September 26, 2024 and sell it today you would earn a total of 2,393 from holding Cognizant Technology Solutions or generate 43.11% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 99.0% |
| Values | Daily Returns |
Cognizant Technology Solutions vs. Centaur Media
Performance |
| Timeline |
| Cognizant Technology |
| Centaur Media |
Cognizant Technology and Centaur Media Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Cognizant Technology and Centaur Media
The main advantage of trading using opposite Cognizant Technology and Centaur Media positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Cognizant Technology position performs unexpectedly, Centaur Media 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 Centaur Media will offset losses from the drop in Centaur Media's long position.| Cognizant Technology vs. Taylor Maritime Investments | Cognizant Technology vs. Monks Investment Trust | Cognizant Technology vs. New Residential Investment | Cognizant Technology vs. TR Property Investment |
| Centaur Media vs. Pfeiffer Vacuum Technology | Centaur Media vs. DFS Furniture PLC | Centaur Media vs. DXC Technology Co | Centaur Media 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 Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..
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