Correlation Between Cognizant Technology and Deutsche Bank
Can any of the company-specific risk be diversified away by investing in both Cognizant Technology and Deutsche Bank 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 Deutsche Bank 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 Deutsche Bank Aktiengesellschaft, you can compare the effects of market volatilities on Cognizant Technology and Deutsche Bank 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 Deutsche Bank. Check out your portfolio center. Please also check ongoing floating volatility patterns of Cognizant Technology and Deutsche Bank.
Diversification Opportunities for Cognizant Technology and Deutsche Bank
0.64 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Cognizant and Deutsche is 0.64. Overlapping area represents the amount of risk that can be diversified away by holding Cognizant Technology Solutions and Deutsche Bank Aktiengesellscha in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Deutsche Bank Aktien 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 Deutsche Bank. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Deutsche Bank Aktien has no effect on the direction of Cognizant Technology i.e., Cognizant Technology and Deutsche Bank go up and down completely randomly.
Pair Corralation between Cognizant Technology and Deutsche Bank
Assuming the 90 days trading horizon Cognizant Technology Solutions is expected to generate 0.06 times more return on investment than Deutsche Bank. However, Cognizant Technology Solutions is 15.91 times less risky than Deutsche Bank. It trades about 0.22 of its potential returns per unit of risk. Deutsche Bank Aktiengesellschaft is currently generating about -0.09 per unit of risk. If you would invest 139,394 in Cognizant Technology Solutions on August 28, 2024 and sell it today you would earn a total of 606.00 from holding Cognizant Technology Solutions or generate 0.43% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 95.24% |
| Values | Daily Returns |
Cognizant Technology Solutions vs. Deutsche Bank Aktiengesellscha
Performance |
| Timeline |
| Cognizant Technology |
| Deutsche Bank Aktien |
Cognizant Technology and Deutsche Bank Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Cognizant Technology and Deutsche Bank
The main advantage of trading using opposite Cognizant Technology and Deutsche Bank positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Cognizant Technology position performs unexpectedly, Deutsche Bank 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 Deutsche Bank will offset losses from the drop in Deutsche Bank's long position.The idea behind Cognizant Technology Solutions and Deutsche Bank Aktiengesellschaft pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.| Deutsche Bank vs. Lloyds Banking Group | Deutsche Bank vs. Glencore plc | Deutsche Bank vs. iShares Trust | Deutsche Bank vs. US Bancorp |
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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.
Other Complementary Tools
| Sync Your Broker Sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors. | |
| Investing Opportunities Build portfolios using our predefined set of ideas and optimize them against your investing preferences | |
| Aroon Oscillator Analyze current equity momentum using Aroon Oscillator and other momentum ratios | |
| Volatility Analysis Get historical volatility and risk analysis based on latest market data | |
| Portfolio Center All portfolio management and optimization tools to improve performance of your portfolios |