Correlation Between Cognizant Technology and Genworth Financial
Can any of the company-specific risk be diversified away by investing in both Cognizant Technology and Genworth Financial 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 Genworth Financial 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 Genworth Financial, you can compare the effects of market volatilities on Cognizant Technology and Genworth Financial 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 Genworth Financial. Check out your portfolio center. Please also check ongoing floating volatility patterns of Cognizant Technology and Genworth Financial.
Diversification Opportunities for Cognizant Technology and Genworth Financial
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Cognizant and Genworth is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Cognizant Technology Solutions and Genworth Financial in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Genworth Financial 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 Genworth Financial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Genworth Financial has no effect on the direction of Cognizant Technology i.e., Cognizant Technology and Genworth Financial go up and down completely randomly.
Pair Corralation between Cognizant Technology and Genworth Financial
Assuming the 90 days trading horizon Cognizant Technology Solutions is expected to generate 1.25 times more return on investment than Genworth Financial. However, Cognizant Technology is 1.25 times more volatile than Genworth Financial. It trades about 0.04 of its potential returns per unit of risk. Genworth Financial is currently generating about 0.01 per unit of risk. If you would invest 117,722 in Cognizant Technology Solutions on November 8, 2024 and sell it today you would earn a total of 22,278 from holding Cognizant Technology Solutions or generate 18.92% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Cognizant Technology Solutions vs. Genworth Financial
Performance |
| Timeline |
| Cognizant Technology |
| Genworth Financial |
Cognizant Technology and Genworth Financial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Cognizant Technology and Genworth Financial
The main advantage of trading using opposite Cognizant Technology and Genworth Financial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Cognizant Technology position performs unexpectedly, Genworth Financial 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 Genworth Financial will offset losses from the drop in Genworth Financial's long position.| Cognizant Technology vs. DXC Technology | Cognizant Technology vs. Samsung Electronics Co | Cognizant Technology vs. McEwen Mining | Cognizant Technology vs. Air Transport Services |
| Genworth Financial vs. First Majestic Silver | Genworth Financial vs. Hoteles City Express | Genworth Financial vs. First Republic Bank | Genworth Financial vs. Lloyds Banking Group |
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 Money Managers module to screen money managers from public funds and ETFs managed around the world.
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