Correlation Between Cognizant Technology and Fulcrum Metals
Can any of the company-specific risk be diversified away by investing in both Cognizant Technology and Fulcrum Metals 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 Fulcrum Metals 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 Fulcrum Metals PLC, you can compare the effects of market volatilities on Cognizant Technology and Fulcrum Metals 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 Fulcrum Metals. Check out your portfolio center. Please also check ongoing floating volatility patterns of Cognizant Technology and Fulcrum Metals.
Diversification Opportunities for Cognizant Technology and Fulcrum Metals
-0.45 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Cognizant and Fulcrum is -0.45. Overlapping area represents the amount of risk that can be diversified away by holding Cognizant Technology Solutions and Fulcrum Metals PLC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fulcrum Metals PLC 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 Fulcrum Metals. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Fulcrum Metals PLC has no effect on the direction of Cognizant Technology i.e., Cognizant Technology and Fulcrum Metals go up and down completely randomly.
Pair Corralation between Cognizant Technology and Fulcrum Metals
Assuming the 90 days trading horizon Cognizant Technology Solutions is expected to generate 0.72 times more return on investment than Fulcrum Metals. However, Cognizant Technology Solutions is 1.38 times less risky than Fulcrum Metals. It trades about 0.04 of its potential returns per unit of risk. Fulcrum Metals PLC is currently generating about -0.08 per unit of risk. If you would invest 6,167 in Cognizant Technology Solutions on October 13, 2024 and sell it today you would earn a total of 1,408 from holding Cognizant Technology Solutions or generate 22.83% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 97.38% |
| Values | Daily Returns |
Cognizant Technology Solutions vs. Fulcrum Metals PLC
Performance |
| Timeline |
| Cognizant Technology |
| Fulcrum Metals PLC |
Cognizant Technology and Fulcrum Metals Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Cognizant Technology and Fulcrum Metals
The main advantage of trading using opposite Cognizant Technology and Fulcrum Metals positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Cognizant Technology position performs unexpectedly, Fulcrum Metals 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 Fulcrum Metals will offset losses from the drop in Fulcrum Metals' long position.| Cognizant Technology vs. Playtech Plc | Cognizant Technology vs. JD Sports Fashion | Cognizant Technology vs. Seche Environnement SA | Cognizant Technology vs. Zoom Video Communications |
| Fulcrum Metals vs. Jacquet Metal Service | Fulcrum Metals vs. DXC Technology Co | Fulcrum Metals vs. Cognizant Technology Solutions | Fulcrum Metals vs. Future Metals NL |
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 File Import module to quickly import all of your third-party portfolios from your local drive in csv format.
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