Correlation Between Cognizant Technology and BigBearai Holdings
Can any of the company-specific risk be diversified away by investing in both Cognizant Technology and BigBearai Holdings 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 BigBearai Holdings 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 BigBearai Holdings, you can compare the effects of market volatilities on Cognizant Technology and BigBearai Holdings 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 BigBearai Holdings. Check out your portfolio center. Please also check ongoing floating volatility patterns of Cognizant Technology and BigBearai Holdings.
Diversification Opportunities for Cognizant Technology and BigBearai Holdings
0.8 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Cognizant and BigBearai is 0.8. Overlapping area represents the amount of risk that can be diversified away by holding Cognizant Technology Solutions and BigBearai Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BigBearai Holdings 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 BigBearai Holdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of BigBearai Holdings has no effect on the direction of Cognizant Technology i.e., Cognizant Technology and BigBearai Holdings go up and down completely randomly.
Pair Corralation between Cognizant Technology and BigBearai Holdings
Given the investment horizon of 90 days Cognizant Technology Solutions is expected to generate 0.5 times more return on investment than BigBearai Holdings. However, Cognizant Technology Solutions is 1.98 times less risky than BigBearai Holdings. It trades about -0.15 of its potential returns per unit of risk. BigBearai Holdings is currently generating about -0.21 per unit of risk. If you would invest 7,794 in Cognizant Technology Solutions on January 23, 2025 and sell it today you would lose (821.00) from holding Cognizant Technology Solutions or give up 10.53% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Cognizant Technology Solutions vs. BigBearai Holdings
Performance |
| Timeline |
| Cognizant Technology |
| BigBearai Holdings |
Cognizant Technology and BigBearai Holdings Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Cognizant Technology and BigBearai Holdings
The main advantage of trading using opposite Cognizant Technology and BigBearai Holdings positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Cognizant Technology position performs unexpectedly, BigBearai Holdings 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 BigBearai Holdings will offset losses from the drop in BigBearai Holdings' long position.| Cognizant Technology vs. Wipro Limited ADR | Cognizant Technology vs. Accenture plc | Cognizant Technology vs. Gartner | Cognizant Technology vs. CACI International |
| BigBearai Holdings vs. Innodata | BigBearai Holdings vs. CLPS Inc | BigBearai Holdings vs. ARB IOT Group | BigBearai Holdings vs. FiscalNote Holdings |
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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.
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