Correlation Between Cognizant Technology and DXC Technology
Can any of the company-specific risk be diversified away by investing in both Cognizant Technology and DXC Technology 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 DXC Technology 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 DXC Technology, you can compare the effects of market volatilities on Cognizant Technology and DXC Technology 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 DXC Technology. Check out your portfolio center. Please also check ongoing floating volatility patterns of Cognizant Technology and DXC Technology.
Diversification Opportunities for Cognizant Technology and DXC Technology
0.36 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Cognizant and DXC is 0.36. Overlapping area represents the amount of risk that can be diversified away by holding Cognizant Technology Solutions and DXC Technology in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on DXC Technology 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 DXC Technology. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of DXC Technology has no effect on the direction of Cognizant Technology i.e., Cognizant Technology and DXC Technology go up and down completely randomly.
Pair Corralation between Cognizant Technology and DXC Technology
If you would invest 13,440 in DXC Technology on October 12, 2024 and sell it today you would earn a total of 0.00 from holding DXC Technology or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 94.74% |
| Values | Daily Returns |
Cognizant Technology Solutions vs. DXC Technology
Performance |
| Timeline |
| Cognizant Technology |
| DXC Technology |
Cognizant Technology and DXC Technology Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Cognizant Technology and DXC Technology
The main advantage of trading using opposite Cognizant Technology and DXC Technology positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Cognizant Technology position performs unexpectedly, DXC Technology 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 DXC Technology will offset losses from the drop in DXC Technology's long position.| Cognizant Technology vs. Fidelity National Information | Cognizant Technology vs. DXC Technology | Cognizant Technology vs. Energisa SA | Cognizant Technology vs. BTG Pactual Logstica |
| DXC Technology vs. Fidelity National Information | DXC Technology vs. Cognizant Technology Solutions | DXC Technology vs. Energisa SA | DXC Technology vs. BTG Pactual Logstica |
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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