Correlation Between Cognizant Technology and Prologis
Can any of the company-specific risk be diversified away by investing in both Cognizant Technology and Prologis 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 Prologis 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 Prologis, you can compare the effects of market volatilities on Cognizant Technology and Prologis 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 Prologis. Check out your portfolio center. Please also check ongoing floating volatility patterns of Cognizant Technology and Prologis.
Diversification Opportunities for Cognizant Technology and Prologis
0.35 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Cognizant and Prologis is 0.35. Overlapping area represents the amount of risk that can be diversified away by holding Cognizant Technology Solutions and Prologis in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Prologis 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 Prologis. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Prologis has no effect on the direction of Cognizant Technology i.e., Cognizant Technology and Prologis go up and down completely randomly.
Pair Corralation between Cognizant Technology and Prologis
Assuming the 90 days trading horizon Cognizant Technology Solutions is expected to generate 1.88 times more return on investment than Prologis. However, Cognizant Technology is 1.88 times more volatile than Prologis. It trades about 0.19 of its potential returns per unit of risk. Prologis is currently generating about 0.18 per unit of risk. If you would invest 43,333 in Cognizant Technology Solutions on December 4, 2024 and sell it today you would earn a total of 5,743 from holding Cognizant Technology Solutions or generate 13.25% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 95.24% |
| Values | Daily Returns |
Cognizant Technology Solutions vs. Prologis
Performance |
| Timeline |
| Cognizant Technology |
| Prologis |
Cognizant Technology and Prologis Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Cognizant Technology and Prologis
The main advantage of trading using opposite Cognizant Technology and Prologis positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Cognizant Technology position performs unexpectedly, Prologis 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 Prologis will offset losses from the drop in Prologis' long position.| Cognizant Technology vs. Datadog, | Cognizant Technology vs. Ares Management | Cognizant Technology vs. Spotify Technology SA | Cognizant Technology vs. Pure Storage, |
| Prologis vs. Annaly Capital Management, | Prologis vs. The Home Depot | Prologis vs. Charter Communications | Prologis vs. Autohome |
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 Comparator module to compare the composition, asset allocations and performance of any two portfolios in your account.
Other Complementary Tools
| Idea Optimizer Use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio | |
| USA ETFs Find actively traded Exchange Traded Funds (ETF) in USA | |
| AI Portfolio Architect Use AI to generate optimal portfolios and find profitable investment opportunities | |
| Bonds Directory Find actively traded corporate debentures issued by US companies | |
| Idea Analyzer Analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas |