Correlation Between Cognizant Technology and Promotora
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By analyzing existing cross correlation between Cognizant Technology Solutions and Promotora y Operadora, you can compare the effects of market volatilities on Cognizant Technology and Promotora 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 Promotora. Check out your portfolio center. Please also check ongoing floating volatility patterns of Cognizant Technology and Promotora.
Diversification Opportunities for Cognizant Technology and Promotora
0.82 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Cognizant and Promotora is 0.82. Overlapping area represents the amount of risk that can be diversified away by holding Cognizant Technology Solutions and Promotora y Operadora in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Promotora y Operadora 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 Promotora. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Promotora y Operadora has no effect on the direction of Cognizant Technology i.e., Cognizant Technology and Promotora go up and down completely randomly.
Pair Corralation between Cognizant Technology and Promotora
Assuming the 90 days trading horizon Cognizant Technology is expected to generate 2.32 times less return on investment than Promotora. But when comparing it to its historical volatility, Cognizant Technology Solutions is 1.45 times less risky than Promotora. It trades about 0.05 of its potential returns per unit of risk. Promotora y Operadora is currently generating about 0.07 of returns per unit of risk over similar time horizon. If you would invest 8,990 in Promotora y Operadora on September 14, 2024 and sell it today you would earn a total of 6,010 from holding Promotora y Operadora or generate 66.85% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Cognizant Technology Solutions vs. Promotora y Operadora
Performance |
| Timeline |
| Cognizant Technology |
| Promotora y Operadora |
Cognizant Technology and Promotora Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Cognizant Technology and Promotora
The main advantage of trading using opposite Cognizant Technology and Promotora positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Cognizant Technology position performs unexpectedly, Promotora 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 Promotora will offset losses from the drop in Promotora's long position.| Cognizant Technology vs. Delta Air Lines | Cognizant Technology vs. CVS Health | Cognizant Technology vs. Verizon Communications | Cognizant Technology vs. Grupo Hotelero Santa |
| Promotora vs. Verizon Communications | Promotora vs. Cognizant Technology Solutions | Promotora vs. GMxico Transportes SAB | Promotora vs. Costco Wholesale |
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 Investing Opportunities module to build portfolios using our predefined set of ideas and optimize them against your investing preferences.
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