Correlation Between Cognizant Technology and Gaztransport Technigaz
Can any of the company-specific risk be diversified away by investing in both Cognizant Technology and Gaztransport Technigaz 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 Gaztransport Technigaz 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 Gaztransport Technigaz SA, you can compare the effects of market volatilities on Cognizant Technology and Gaztransport Technigaz 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 Gaztransport Technigaz. Check out your portfolio center. Please also check ongoing floating volatility patterns of Cognizant Technology and Gaztransport Technigaz.
Diversification Opportunities for Cognizant Technology and Gaztransport Technigaz
0.33 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Cognizant and Gaztransport is 0.33. Overlapping area represents the amount of risk that can be diversified away by holding Cognizant Technology Solutions and Gaztransport Technigaz SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Gaztransport Technigaz 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 Gaztransport Technigaz. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Gaztransport Technigaz has no effect on the direction of Cognizant Technology i.e., Cognizant Technology and Gaztransport Technigaz go up and down completely randomly.
Pair Corralation between Cognizant Technology and Gaztransport Technigaz
Assuming the 90 days horizon Cognizant Technology Solutions is expected to under-perform the Gaztransport Technigaz. But the stock apears to be less risky and, when comparing its historical volatility, Cognizant Technology Solutions is 1.75 times less risky than Gaztransport Technigaz. The stock trades about -0.08 of its potential returns per unit of risk. The Gaztransport Technigaz SA is currently generating about 0.36 of returns per unit of risk over similar time horizon. If you would invest 12,780 in Gaztransport Technigaz SA on October 23, 2024 and sell it today you would earn a total of 1,640 from holding Gaztransport Technigaz SA or generate 12.83% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 94.12% |
| Values | Daily Returns |
Cognizant Technology Solutions vs. Gaztransport Technigaz SA
Performance |
| Timeline |
| Cognizant Technology |
| Gaztransport Technigaz |
Cognizant Technology and Gaztransport Technigaz Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Cognizant Technology and Gaztransport Technigaz
The main advantage of trading using opposite Cognizant Technology and Gaztransport Technigaz positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Cognizant Technology position performs unexpectedly, Gaztransport Technigaz 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 Gaztransport Technigaz will offset losses from the drop in Gaztransport Technigaz's long position.| Cognizant Technology vs. US FOODS HOLDING | Cognizant Technology vs. CAL MAINE FOODS | Cognizant Technology vs. GEELY AUTOMOBILE | Cognizant Technology vs. Ebro Foods SA |
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 Sign In To Macroaxis module to sign in to explore Macroaxis' wealth optimization platform and fintech modules.
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