Correlation Between Accenture Plc and Cognizant Technology
Can any of the company-specific risk be diversified away by investing in both Accenture Plc and Cognizant Technology 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 Accenture Plc and Cognizant Technology into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Accenture plc and Cognizant Technology Solutions, you can compare the effects of market volatilities on Accenture Plc and Cognizant Technology 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 Accenture Plc with a short position of Cognizant Technology. Check out your portfolio center. Please also check ongoing floating volatility patterns of Accenture Plc and Cognizant Technology.
Diversification Opportunities for Accenture Plc and Cognizant Technology
0.48 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Accenture and Cognizant is 0.48. Overlapping area represents the amount of risk that can be diversified away by holding Accenture plc and Cognizant Technology Solutions in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cognizant Technology and Accenture Plc 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 Accenture plc are associated (or correlated) with Cognizant Technology. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Cognizant Technology has no effect on the direction of Accenture Plc i.e., Accenture Plc and Cognizant Technology go up and down completely randomly.
Pair Corralation between Accenture Plc and Cognizant Technology
Assuming the 90 days trading horizon Accenture Plc is expected to generate 1.05 times less return on investment than Cognizant Technology. In addition to that, Accenture Plc is 1.35 times more volatile than Cognizant Technology Solutions. It trades about 0.05 of its total potential returns per unit of risk. Cognizant Technology Solutions is currently generating about 0.07 per unit of volatility. If you would invest 32,320 in Cognizant Technology Solutions on September 4, 2024 and sell it today you would earn a total of 11,013 from holding Cognizant Technology Solutions or generate 34.07% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 70.87% |
| Values | Daily Returns |
Accenture plc vs. Cognizant Technology Solutions
Performance |
| Timeline |
| Accenture plc |
| Cognizant Technology |
Accenture Plc and Cognizant Technology Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Accenture Plc and Cognizant Technology
The main advantage of trading using opposite Accenture Plc and Cognizant Technology positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Accenture Plc position performs unexpectedly, Cognizant Technology 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 Cognizant Technology will offset losses from the drop in Cognizant Technology's long position.| Accenture Plc vs. Unity Software | Accenture Plc vs. Paycom Software | Accenture Plc vs. Zoom Video Communications | Accenture Plc vs. Technos SA |
| Cognizant Technology vs. United Rentals | Cognizant Technology vs. Marvell Technology | Cognizant Technology vs. The Home Depot | Cognizant Technology vs. Beyond Meat |
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 Share Portfolio module to track or share privately all of your investments from the convenience of any device.
Other Complementary Tools
| ETF Categories List of ETF categories grouped based on various criteria, such as the investment strategy or type of investments | |
| Bonds Directory Find actively traded corporate debentures issued by US companies | |
| Premium Stories Follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope | |
| Cryptocurrency Center Build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency | |
| Portfolio Analyzer Portfolio analysis module that provides access to portfolio diagnostics and optimization engine |