Correlation Between Cognizant Technology and MyHealthChecked Plc
Can any of the company-specific risk be diversified away by investing in both Cognizant Technology and MyHealthChecked Plc 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 MyHealthChecked Plc 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 MyHealthChecked Plc, you can compare the effects of market volatilities on Cognizant Technology and MyHealthChecked Plc 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 MyHealthChecked Plc. Check out your portfolio center. Please also check ongoing floating volatility patterns of Cognizant Technology and MyHealthChecked Plc.
Diversification Opportunities for Cognizant Technology and MyHealthChecked Plc
-0.23 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Cognizant and MyHealthChecked is -0.23. Overlapping area represents the amount of risk that can be diversified away by holding Cognizant Technology Solutions and MyHealthChecked Plc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on MyHealthChecked 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 MyHealthChecked Plc. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of MyHealthChecked Plc has no effect on the direction of Cognizant Technology i.e., Cognizant Technology and MyHealthChecked Plc go up and down completely randomly.
Pair Corralation between Cognizant Technology and MyHealthChecked Plc
Assuming the 90 days trading horizon Cognizant Technology is expected to generate 1.44 times less return on investment than MyHealthChecked Plc. But when comparing it to its historical volatility, Cognizant Technology Solutions is 2.94 times less risky than MyHealthChecked Plc. It trades about 0.1 of its potential returns per unit of risk. MyHealthChecked Plc is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest 1,000.00 in MyHealthChecked Plc on September 3, 2024 and sell it today you would earn a total of 200.00 from holding MyHealthChecked Plc or generate 20.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 99.32% |
| Values | Daily Returns |
Cognizant Technology Solutions vs. MyHealthChecked Plc
Performance |
| Timeline |
| Cognizant Technology |
| MyHealthChecked Plc |
Cognizant Technology and MyHealthChecked Plc Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Cognizant Technology and MyHealthChecked Plc
The main advantage of trading using opposite Cognizant Technology and MyHealthChecked Plc positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Cognizant Technology position performs unexpectedly, MyHealthChecked Plc 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 MyHealthChecked Plc will offset losses from the drop in MyHealthChecked Plc's long position.| Cognizant Technology vs. SBM Offshore NV | Cognizant Technology vs. Taylor Maritime Investments | Cognizant Technology vs. New Residential Investment | Cognizant Technology vs. Spirent Communications plc |
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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 Anywhere module to track or share privately all of your investments from the convenience of any device.
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