Correlation Between Cognizant Technology and Mangels Industrial
Can any of the company-specific risk be diversified away by investing in both Cognizant Technology and Mangels Industrial 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 Mangels Industrial 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 Mangels Industrial SA, you can compare the effects of market volatilities on Cognizant Technology and Mangels Industrial 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 Mangels Industrial. Check out your portfolio center. Please also check ongoing floating volatility patterns of Cognizant Technology and Mangels Industrial.
Diversification Opportunities for Cognizant Technology and Mangels Industrial
-0.58 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Cognizant and Mangels is -0.58. Overlapping area represents the amount of risk that can be diversified away by holding Cognizant Technology Solutions and Mangels Industrial SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mangels Industrial 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 Mangels Industrial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Mangels Industrial has no effect on the direction of Cognizant Technology i.e., Cognizant Technology and Mangels Industrial go up and down completely randomly.
Pair Corralation between Cognizant Technology and Mangels Industrial
Assuming the 90 days trading horizon Cognizant Technology Solutions is expected to generate 0.13 times more return on investment than Mangels Industrial. However, Cognizant Technology Solutions is 7.46 times less risky than Mangels Industrial. It trades about 0.26 of its potential returns per unit of risk. Mangels Industrial SA is currently generating about -0.48 per unit of risk. If you would invest 42,957 in Cognizant Technology Solutions on August 30, 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 Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Cognizant Technology Solutions vs. Mangels Industrial SA
Performance |
| Timeline |
| Cognizant Technology |
| Mangels Industrial |
Cognizant Technology and Mangels Industrial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Cognizant Technology and Mangels Industrial
The main advantage of trading using opposite Cognizant Technology and Mangels Industrial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Cognizant Technology position performs unexpectedly, Mangels Industrial 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 Mangels Industrial will offset losses from the drop in Mangels Industrial's long position.| Cognizant Technology vs. Fidelity National Information | Cognizant Technology vs. BTG Pactual Logstica | Cognizant Technology vs. Plano Plano Desenvolvimento | Cognizant Technology vs. The Procter Gamble |
| Mangels Industrial vs. Schulz SA | Mangels Industrial vs. Springs Global Participaes | Mangels Industrial vs. Marcopolo 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 Price Transformation module to use Price Transformation models to analyze the depth of different equity instruments across global markets.
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