Correlation Between Cognizant Technology and Gartner
Can any of the company-specific risk be diversified away by investing in both Cognizant Technology and Gartner 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 Gartner 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 Gartner, you can compare the effects of market volatilities on Cognizant Technology and Gartner 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 Gartner. Check out your portfolio center. Please also check ongoing floating volatility patterns of Cognizant Technology and Gartner.
Diversification Opportunities for Cognizant Technology and Gartner
0.54 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Cognizant and Gartner is 0.54. Overlapping area represents the amount of risk that can be diversified away by holding Cognizant Technology Solutions and Gartner in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Gartner 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 Gartner. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Gartner has no effect on the direction of Cognizant Technology i.e., Cognizant Technology and Gartner go up and down completely randomly.
Pair Corralation between Cognizant Technology and Gartner
Given the investment horizon of 90 days Cognizant Technology Solutions is expected to generate 1.2 times more return on investment than Gartner. However, Cognizant Technology is 1.2 times more volatile than Gartner. It trades about 0.2 of its potential returns per unit of risk. Gartner is currently generating about 0.04 per unit of risk. If you would invest 7,469 in Cognizant Technology Solutions on August 27, 2024 and sell it today you would earn a total of 594.00 from holding Cognizant Technology Solutions or generate 7.95% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Cognizant Technology Solutions vs. Gartner
Performance |
| Timeline |
| Cognizant Technology |
| Gartner |
Cognizant Technology and Gartner Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Cognizant Technology and Gartner
The main advantage of trading using opposite Cognizant Technology and Gartner positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Cognizant Technology position performs unexpectedly, Gartner 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 Gartner will offset losses from the drop in Gartner's long position.| Cognizant Technology vs. Wipro Limited ADR | Cognizant Technology vs. Accenture plc | Cognizant Technology vs. Gartner | Cognizant Technology vs. CACI International |
| Gartner vs. Data Storage Corp | Gartner vs. Usio Inc | Gartner vs. ARB IOT Group | Gartner 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 Portfolio Dashboard module to portfolio dashboard that provides centralized access to all your investments.
Other Complementary Tools
| Equity Valuation Check real value of public entities based on technical and fundamental data | |
| Cryptocurrency Center Build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency | |
| Positions Ratings Determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance | |
| Pair Correlation Compare performance and examine fundamental relationship between any two equity instruments | |
| Funds Screener Find actively-traded funds from around the world traded on over 30 global exchanges |