Correlation Between COSMOSTEEL HLDGS and Cognizant Technology
Can any of the company-specific risk be diversified away by investing in both COSMOSTEEL HLDGS 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 COSMOSTEEL HLDGS and Cognizant Technology into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between COSMOSTEEL HLDGS and Cognizant Technology Solutions, you can compare the effects of market volatilities on COSMOSTEEL HLDGS 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 COSMOSTEEL HLDGS with a short position of Cognizant Technology. Check out your portfolio center. Please also check ongoing floating volatility patterns of COSMOSTEEL HLDGS and Cognizant Technology.
Diversification Opportunities for COSMOSTEEL HLDGS and Cognizant Technology
-0.37 | Correlation Coefficient |
Very good diversification
The 3 months correlation between COSMOSTEEL and Cognizant is -0.37. Overlapping area represents the amount of risk that can be diversified away by holding COSMOSTEEL HLDGS and Cognizant Technology Solutions in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cognizant Technology and COSMOSTEEL HLDGS 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 COSMOSTEEL HLDGS 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 COSMOSTEEL HLDGS i.e., COSMOSTEEL HLDGS and Cognizant Technology go up and down completely randomly.
Pair Corralation between COSMOSTEEL HLDGS and Cognizant Technology
Assuming the 90 days trading horizon COSMOSTEEL HLDGS is expected to generate 1.48 times less return on investment than Cognizant Technology. But when comparing it to its historical volatility, COSMOSTEEL HLDGS is 1.09 times less risky than Cognizant Technology. It trades about 0.19 of its potential returns per unit of risk. Cognizant Technology Solutions is currently generating about 0.26 of returns per unit of risk over similar time horizon. If you would invest 6,814 in Cognizant Technology Solutions on September 3, 2024 and sell it today you would earn a total of 803.00 from holding Cognizant Technology Solutions or generate 11.78% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
COSMOSTEEL HLDGS vs. Cognizant Technology Solutions
Performance |
| Timeline |
| COSMOSTEEL HLDGS |
| Cognizant Technology |
COSMOSTEEL HLDGS and Cognizant Technology Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with COSMOSTEEL HLDGS and Cognizant Technology
The main advantage of trading using opposite COSMOSTEEL HLDGS and Cognizant Technology positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if COSMOSTEEL HLDGS 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.| COSMOSTEEL HLDGS vs. EHEALTH | COSMOSTEEL HLDGS vs. Taylor Morrison Home | COSMOSTEEL HLDGS vs. Neinor Homes SA | COSMOSTEEL HLDGS vs. FEMALE HEALTH |
| Cognizant Technology vs. International Business Machines | Cognizant Technology vs. FUJITSU LTD ADR | Cognizant Technology vs. Superior Plus Corp | Cognizant Technology vs. NMI Holdings |
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 Money Flow Index module to determine momentum by analyzing Money Flow Index and other technical indicators.
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