Correlation Between Cognizant Technology and Pets At
Can any of the company-specific risk be diversified away by investing in both Cognizant Technology and Pets At 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 Pets At 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 Pets at Home, you can compare the effects of market volatilities on Cognizant Technology and Pets At 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 Pets At. Check out your portfolio center. Please also check ongoing floating volatility patterns of Cognizant Technology and Pets At.
Diversification Opportunities for Cognizant Technology and Pets At
-0.6 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Cognizant and Pets is -0.6. Overlapping area represents the amount of risk that can be diversified away by holding Cognizant Technology Solutions and Pets at Home in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Pets at Home 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 Pets At. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Pets at Home has no effect on the direction of Cognizant Technology i.e., Cognizant Technology and Pets At go up and down completely randomly.
Pair Corralation between Cognizant Technology and Pets At
Assuming the 90 days trading horizon Cognizant Technology Solutions is expected to generate 0.79 times more return on investment than Pets At. However, Cognizant Technology Solutions is 1.27 times less risky than Pets At. It trades about 0.05 of its potential returns per unit of risk. Pets at Home is currently generating about 0.0 per unit of risk. If you would invest 5,739 in Cognizant Technology Solutions on September 3, 2024 and sell it today you would earn a total of 2,341 from holding Cognizant Technology Solutions or generate 40.79% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 99.2% |
| Values | Daily Returns |
Cognizant Technology Solutions vs. Pets at Home
Performance |
| Timeline |
| Cognizant Technology |
| Pets at Home |
Cognizant Technology and Pets At Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Cognizant Technology and Pets At
The main advantage of trading using opposite Cognizant Technology and Pets At positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Cognizant Technology position performs unexpectedly, Pets At 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 Pets At will offset losses from the drop in Pets At'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 |
| Pets At vs. United Airlines Holdings | Pets At vs. International Consolidated Airlines | Pets At vs. LPKF Laser Electronics | Pets At vs. Hilton Food Group |
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 Analyst Advice module to analyst recommendations and target price estimates broken down by several categories.
Other Complementary Tools
| Headlines Timeline Stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity | |
| Positions Ratings Determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance | |
| Theme Ratings Determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance | |
| ETF Categories List of ETF categories grouped based on various criteria, such as the investment strategy or type of investments | |
| Pattern Recognition Use different Pattern Recognition models to time the market across multiple global exchanges |