Correlation Between Allianz Technology and Cognizant Technology
Can any of the company-specific risk be diversified away by investing in both Allianz Technology 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 Allianz Technology and Cognizant Technology into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Allianz Technology Trust and Cognizant Technology Solutions, you can compare the effects of market volatilities on Allianz Technology 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 Allianz Technology with a short position of Cognizant Technology. Check out your portfolio center. Please also check ongoing floating volatility patterns of Allianz Technology and Cognizant Technology.
Diversification Opportunities for Allianz Technology and Cognizant Technology
0.47 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Allianz and Cognizant is 0.47. Overlapping area represents the amount of risk that can be diversified away by holding Allianz Technology Trust and Cognizant Technology Solutions in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cognizant Technology and Allianz 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 Allianz Technology Trust 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 Allianz Technology i.e., Allianz Technology and Cognizant Technology go up and down completely randomly.
Pair Corralation between Allianz Technology and Cognizant Technology
Assuming the 90 days trading horizon Allianz Technology Trust is expected to generate 1.28 times more return on investment than Cognizant Technology. However, Allianz Technology is 1.28 times more volatile than Cognizant Technology Solutions. It trades about 0.08 of its potential returns per unit of risk. Cognizant Technology Solutions is currently generating about 0.06 per unit of risk. If you would invest 22,800 in Allianz Technology Trust on August 24, 2024 and sell it today you would earn a total of 17,000 from holding Allianz Technology Trust or generate 74.56% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 98.8% |
| Values | Daily Returns |
Allianz Technology Trust vs. Cognizant Technology Solutions
Performance |
| Timeline |
| Allianz Technology Trust |
| Cognizant Technology |
Allianz Technology and Cognizant Technology Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Allianz Technology and Cognizant Technology
The main advantage of trading using opposite Allianz Technology and Cognizant Technology positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Allianz Technology 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.| Allianz Technology vs. Home Depot | Allianz Technology vs. River and Mercantile | Allianz Technology vs. Chrysalis Investments | Allianz Technology vs. Sherborne Investors Guernsey |
| Cognizant Technology vs. Everyman Media Group | Cognizant Technology vs. Hollywood Bowl Group | Cognizant Technology vs. Young Cos Brewery | Cognizant Technology vs. SBM Offshore NV |
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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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