Correlation Between Cognizant Technology and ICICI Bank
Can any of the company-specific risk be diversified away by investing in both Cognizant Technology and ICICI Bank 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 ICICI Bank 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 ICICI Bank Limited, you can compare the effects of market volatilities on Cognizant Technology and ICICI Bank 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 ICICI Bank. Check out your portfolio center. Please also check ongoing floating volatility patterns of Cognizant Technology and ICICI Bank.
Diversification Opportunities for Cognizant Technology and ICICI Bank
0.52 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Cognizant and ICICI is 0.52. Overlapping area represents the amount of risk that can be diversified away by holding Cognizant Technology Solutions and ICICI Bank Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ICICI Bank Limited 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 ICICI Bank. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ICICI Bank Limited has no effect on the direction of Cognizant Technology i.e., Cognizant Technology and ICICI Bank go up and down completely randomly.
Pair Corralation between Cognizant Technology and ICICI Bank
If you would invest 43,333 in Cognizant Technology Solutions on October 16, 2024 and sell it today you would earn a total of 0.00 from holding Cognizant Technology Solutions or generate 0.0% 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. ICICI Bank Limited
Performance |
| Timeline |
| Cognizant Technology |
| ICICI Bank Limited |
Cognizant Technology and ICICI Bank Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Cognizant Technology and ICICI Bank
The main advantage of trading using opposite Cognizant Technology and ICICI Bank positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Cognizant Technology position performs unexpectedly, ICICI Bank 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 ICICI Bank will offset losses from the drop in ICICI Bank's long position.| Cognizant Technology vs. PENN Entertainment, | Cognizant Technology vs. Guidewire Software, | Cognizant Technology vs. Spotify Technology SA | Cognizant Technology vs. Unity Software |
| ICICI Bank vs. Unity Software | ICICI Bank vs. Cognizant Technology Solutions | ICICI Bank vs. Clover Health Investments, | ICICI Bank vs. Broadcom |
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 Sign In To Macroaxis module to sign in to explore Macroaxis' wealth optimization platform and fintech modules.
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