Correlation Between Cognizant Technology and Greenroc Mining
Can any of the company-specific risk be diversified away by investing in both Cognizant Technology and Greenroc Mining 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 Greenroc Mining 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 Greenroc Mining PLC, you can compare the effects of market volatilities on Cognizant Technology and Greenroc Mining 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 Greenroc Mining. Check out your portfolio center. Please also check ongoing floating volatility patterns of Cognizant Technology and Greenroc Mining.
Diversification Opportunities for Cognizant Technology and Greenroc Mining
-0.15 | Correlation Coefficient |
Good diversification
The 3 months correlation between Cognizant and Greenroc is -0.15. Overlapping area represents the amount of risk that can be diversified away by holding Cognizant Technology Solutions and Greenroc Mining PLC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Greenroc Mining 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 Greenroc Mining. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Greenroc Mining PLC has no effect on the direction of Cognizant Technology i.e., Cognizant Technology and Greenroc Mining go up and down completely randomly.
Pair Corralation between Cognizant Technology and Greenroc Mining
Assuming the 90 days trading horizon Cognizant Technology Solutions is expected to generate 0.4 times more return on investment than Greenroc Mining. However, Cognizant Technology Solutions is 2.49 times less risky than Greenroc Mining. It trades about 0.19 of its potential returns per unit of risk. Greenroc Mining PLC is currently generating about -0.04 per unit of risk. If you would invest 7,479 in Cognizant Technology Solutions on August 29, 2024 and sell it today you would earn a total of 588.00 from holding Cognizant Technology Solutions or generate 7.86% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 95.65% |
| Values | Daily Returns |
Cognizant Technology Solutions vs. Greenroc Mining PLC
Performance |
| Timeline |
| Cognizant Technology |
| Greenroc Mining PLC |
Cognizant Technology and Greenroc Mining Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Cognizant Technology and Greenroc Mining
The main advantage of trading using opposite Cognizant Technology and Greenroc Mining positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Cognizant Technology position performs unexpectedly, Greenroc Mining 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 Greenroc Mining will offset losses from the drop in Greenroc Mining's long position.| Cognizant Technology vs. Lendinvest PLC | Cognizant Technology vs. Neometals | Cognizant Technology vs. Coor Service Management | Cognizant Technology vs. Albion Technology General |
| Greenroc Mining vs. Atalaya Mining | Greenroc Mining vs. Anglo Asian Mining | Greenroc Mining vs. Metals Exploration 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 Latest Portfolios module to quick portfolio dashboard that showcases your latest portfolios.
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