Correlation Between Computer Task and Cognizant Technology
Can any of the company-specific risk be diversified away by investing in both Computer Task 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 Computer Task and Cognizant Technology into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Computer Task Group and Cognizant Technology Solutions, you can compare the effects of market volatilities on Computer Task 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 Computer Task with a short position of Cognizant Technology. Check out your portfolio center. Please also check ongoing floating volatility patterns of Computer Task and Cognizant Technology.
Diversification Opportunities for Computer Task and Cognizant Technology
0.21 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Computer and Cognizant is 0.21. Overlapping area represents the amount of risk that can be diversified away by holding Computer Task Group and Cognizant Technology Solutions in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cognizant Technology and Computer Task 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 Computer Task Group 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 Computer Task i.e., Computer Task and Cognizant Technology go up and down completely randomly.
Pair Corralation between Computer Task and Cognizant Technology
If you would invest 7,577 in Cognizant Technology Solutions on August 24, 2024 and sell it today you would earn a total of 309.00 from holding Cognizant Technology Solutions or generate 4.08% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 4.35% |
| Values | Daily Returns |
Computer Task Group vs. Cognizant Technology Solutions
Performance |
| Timeline |
| Computer Task Group |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| Cognizant Technology |
Computer Task and Cognizant Technology Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Computer Task and Cognizant Technology
The main advantage of trading using opposite Computer Task and Cognizant Technology positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Computer Task 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.| Computer Task vs. The Hackett Group | Computer Task vs. CSP Inc | Computer Task vs. Nayax | Computer Task vs. Formula Systems 1985 |
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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 Insider Screener module to find insiders across different sectors to evaluate their impact on performance.
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