Correlation Between Cognizant Technology and McEwen Mining
Can any of the company-specific risk be diversified away by investing in both Cognizant Technology and McEwen 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 McEwen 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 McEwen Mining, you can compare the effects of market volatilities on Cognizant Technology and McEwen 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 McEwen Mining. Check out your portfolio center. Please also check ongoing floating volatility patterns of Cognizant Technology and McEwen Mining.
Diversification Opportunities for Cognizant Technology and McEwen Mining
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Cognizant and McEwen is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Cognizant Technology Solutions and McEwen Mining in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on McEwen 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 McEwen Mining. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of McEwen Mining has no effect on the direction of Cognizant Technology i.e., Cognizant Technology and McEwen Mining go up and down completely randomly.
Pair Corralation between Cognizant Technology and McEwen Mining
Assuming the 90 days trading horizon Cognizant Technology is expected to generate 4.06 times less return on investment than McEwen Mining. But when comparing it to its historical volatility, Cognizant Technology Solutions is 4.44 times less risky than McEwen Mining. It trades about 0.11 of its potential returns per unit of risk. McEwen Mining is currently generating about 0.1 of returns per unit of risk over similar time horizon. If you would invest 16,600 in McEwen Mining on November 2, 2024 and sell it today you would earn a total of 3,200 from holding McEwen Mining or generate 19.28% 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. McEwen Mining
Performance |
| Timeline |
| Cognizant Technology |
| McEwen Mining |
Cognizant Technology and McEwen Mining Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Cognizant Technology and McEwen Mining
The main advantage of trading using opposite Cognizant Technology and McEwen Mining positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Cognizant Technology position performs unexpectedly, McEwen 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 McEwen Mining will offset losses from the drop in McEwen Mining's long position.| Cognizant Technology vs. Grupo Sports World | Cognizant Technology vs. Ameriprise Financial | Cognizant Technology vs. Desarrolladora Homex SAB | Cognizant Technology vs. Verizon Communications |
| McEwen Mining vs. Verizon Communications | McEwen Mining vs. Grupo Sports World | McEwen Mining vs. Samsung Electronics Co | McEwen Mining vs. Monster Beverage Corp |
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 Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.
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