Correlation Between Cognizant Technology and Apple
Can any of the company-specific risk be diversified away by investing in both Cognizant Technology and Apple 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 Apple 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 Apple Inc, you can compare the effects of market volatilities on Cognizant Technology and Apple 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 Apple. Check out your portfolio center. Please also check ongoing floating volatility patterns of Cognizant Technology and Apple.
Diversification Opportunities for Cognizant Technology and Apple
0.12 | Correlation Coefficient |
Average diversification
The 3 months correlation between Cognizant and Apple is 0.12. Overlapping area represents the amount of risk that can be diversified away by holding Cognizant Technology Solutions and Apple Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Apple Inc 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 Apple. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Apple Inc has no effect on the direction of Cognizant Technology i.e., Cognizant Technology and Apple go up and down completely randomly.
Pair Corralation between Cognizant Technology and Apple
Assuming the 90 days trading horizon Cognizant Technology Solutions is expected to generate 0.06 times more return on investment than Apple. However, Cognizant Technology Solutions is 15.72 times less risky than Apple. It trades about 0.15 of its potential returns per unit of risk. Apple Inc is currently generating about -0.02 per unit of risk. If you would invest 42,957 in Cognizant Technology Solutions on October 29, 2024 and sell it today you would earn a total of 376.00 from holding Cognizant Technology Solutions or generate 0.88% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Cognizant Technology Solutions vs. Apple Inc
Performance |
| Timeline |
| Cognizant Technology |
| Apple Inc |
Cognizant Technology and Apple Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Cognizant Technology and Apple
The main advantage of trading using opposite Cognizant Technology and Apple positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Cognizant Technology position performs unexpectedly, Apple 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 Apple will offset losses from the drop in Apple's long position.| Cognizant Technology vs. Broadridge Financial Solutions, | Cognizant Technology vs. Micron Technology | Cognizant Technology vs. Pure Storage, | Cognizant Technology vs. Patria Investments Limited |
| Apple vs. Verizon Communications | Apple vs. Ryanair Holdings plc | Apple vs. Zoom Video Communications | Apple vs. Metalurgica Gerdau SA |
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 Equity Forecasting module to use basic forecasting models to generate price predictions and determine price momentum.
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