Correlation Between Cognizant Technology and Perseus Mining
Can any of the company-specific risk be diversified away by investing in both Cognizant Technology and Perseus Mining 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 Perseus Mining 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 Perseus Mining Limited, you can compare the effects of market volatilities on Cognizant Technology and Perseus Mining 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 Perseus Mining. Check out your portfolio center. Please also check ongoing floating volatility patterns of Cognizant Technology and Perseus Mining.
Diversification Opportunities for Cognizant Technology and Perseus Mining
0.38 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Cognizant and Perseus is 0.38. Overlapping area represents the amount of risk that can be diversified away by holding Cognizant Technology Solutions and Perseus Mining Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Perseus Mining 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 Perseus Mining. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Perseus Mining has no effect on the direction of Cognizant Technology i.e., Cognizant Technology and Perseus Mining go up and down completely randomly.
Pair Corralation between Cognizant Technology and Perseus Mining
Assuming the 90 days horizon Cognizant Technology is expected to generate 1.08 times less return on investment than Perseus Mining. But when comparing it to its historical volatility, Cognizant Technology Solutions is 1.2 times less risky than Perseus Mining. It trades about 0.3 of its potential returns per unit of risk. Perseus Mining Limited is currently generating about 0.27 of returns per unit of risk over similar time horizon. If you would invest 155.00 in Perseus Mining Limited on November 6, 2024 and sell it today you would earn a total of 14.00 from holding Perseus Mining Limited or generate 9.03% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 95.24% |
| Values | Daily Returns |
Cognizant Technology Solutions vs. Perseus Mining Limited
Performance |
| Timeline |
| Cognizant Technology |
| Perseus Mining |
Cognizant Technology and Perseus Mining Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Cognizant Technology and Perseus Mining
The main advantage of trading using opposite Cognizant Technology and Perseus Mining positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Cognizant Technology position performs unexpectedly, Perseus Mining 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 Perseus Mining will offset losses from the drop in Perseus Mining's long position.| Cognizant Technology vs. FIRST SHIP LEASE | Cognizant Technology vs. Sixt Leasing SE | Cognizant Technology vs. FUYO GENERAL LEASE | Cognizant Technology vs. Global Ship Lease |
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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 Headlines Timeline module to stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity.
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