Correlation Between Cognizant Technology and INTUITIVE SURGICAL
Can any of the company-specific risk be diversified away by investing in both Cognizant Technology and INTUITIVE SURGICAL 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 INTUITIVE SURGICAL 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 INTUITIVE SURGICAL, you can compare the effects of market volatilities on Cognizant Technology and INTUITIVE SURGICAL 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 INTUITIVE SURGICAL. Check out your portfolio center. Please also check ongoing floating volatility patterns of Cognizant Technology and INTUITIVE SURGICAL.
Diversification Opportunities for Cognizant Technology and INTUITIVE SURGICAL
0.82 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Cognizant and INTUITIVE is 0.82. Overlapping area represents the amount of risk that can be diversified away by holding Cognizant Technology Solutions and INTUITIVE SURGICAL in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on INTUITIVE SURGICAL 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 INTUITIVE SURGICAL. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of INTUITIVE SURGICAL has no effect on the direction of Cognizant Technology i.e., Cognizant Technology and INTUITIVE SURGICAL go up and down completely randomly.
Pair Corralation between Cognizant Technology and INTUITIVE SURGICAL
Assuming the 90 days horizon Cognizant Technology is expected to generate 1.01 times less return on investment than INTUITIVE SURGICAL. In addition to that, Cognizant Technology is 1.39 times more volatile than INTUITIVE SURGICAL. It trades about 0.21 of its total potential returns per unit of risk. INTUITIVE SURGICAL is currently generating about 0.3 per unit of volatility. If you would invest 47,325 in INTUITIVE SURGICAL on August 28, 2024 and sell it today you would earn a total of 5,025 from holding INTUITIVE SURGICAL or generate 10.62% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Cognizant Technology Solutions vs. INTUITIVE SURGICAL
Performance |
| Timeline |
| Cognizant Technology |
| INTUITIVE SURGICAL |
Cognizant Technology and INTUITIVE SURGICAL Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Cognizant Technology and INTUITIVE SURGICAL
The main advantage of trading using opposite Cognizant Technology and INTUITIVE SURGICAL positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Cognizant Technology position performs unexpectedly, INTUITIVE SURGICAL 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 INTUITIVE SURGICAL will offset losses from the drop in INTUITIVE SURGICAL's long position.| Cognizant Technology vs. ATRESMEDIA | Cognizant Technology vs. SEI INVESTMENTS | Cognizant Technology vs. REGAL ASIAN INVESTMENTS | Cognizant Technology vs. ANTA SPORTS PRODUCT |
| INTUITIVE SURGICAL vs. Wizz Air Holdings | INTUITIVE SURGICAL vs. ALTAIR RES INC | INTUITIVE SURGICAL vs. WIZZ AIR HLDGUNSPADR4 | INTUITIVE SURGICAL vs. DIVERSIFIED ROYALTY |
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 Portfolio Comparator module to compare the composition, asset allocations and performance of any two portfolios in your account.
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