Correlation Between Cognizant Technology and Unity Software
Can any of the company-specific risk be diversified away by investing in both Cognizant Technology and Unity Software 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 Unity Software 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 Unity Software, you can compare the effects of market volatilities on Cognizant Technology and Unity Software 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 Unity Software. Check out your portfolio center. Please also check ongoing floating volatility patterns of Cognizant Technology and Unity Software.
Diversification Opportunities for Cognizant Technology and Unity Software
0.14 | Correlation Coefficient |
Average diversification
The 3 months correlation between Cognizant and Unity is 0.14. Overlapping area represents the amount of risk that can be diversified away by holding Cognizant Technology Solutions and Unity Software in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Unity Software 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 Unity Software. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Unity Software has no effect on the direction of Cognizant Technology i.e., Cognizant Technology and Unity Software go up and down completely randomly.
Pair Corralation between Cognizant Technology and Unity Software
Assuming the 90 days trading horizon Cognizant Technology is expected to generate 13.52 times less return on investment than Unity Software. But when comparing it to its historical volatility, Cognizant Technology Solutions is 5.99 times less risky than Unity Software. It trades about 0.04 of its potential returns per unit of risk. Unity Software is currently generating about 0.1 of returns per unit of risk over similar time horizon. If you would invest 460.00 in Unity Software on October 26, 2024 and sell it today you would earn a total of 217.00 from holding Unity Software or generate 47.17% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 99.19% |
| Values | Daily Returns |
Cognizant Technology Solutions vs. Unity Software
Performance |
| Timeline |
| Cognizant Technology |
| Unity Software |
Cognizant Technology and Unity Software Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Cognizant Technology and Unity Software
The main advantage of trading using opposite Cognizant Technology and Unity Software positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Cognizant Technology position performs unexpectedly, Unity Software 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 Unity Software will offset losses from the drop in Unity Software's long position.| Cognizant Technology vs. LPL Financial Holdings | Cognizant Technology vs. Ameriprise Financial | Cognizant Technology vs. Nordon Indstrias Metalrgicas | Cognizant Technology vs. MAHLE Metal Leve |
| Unity Software vs. Clover Health Investments, | Unity Software vs. Tyson Foods | Unity Software vs. JB Hunt Transport | Unity Software vs. Liberty Broadband |
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 CEOs Directory module to screen CEOs from public companies around the world.
Other Complementary Tools
| Price Ceiling Movement Calculate and plot Price Ceiling Movement for different equity instruments | |
| Pair Correlation Compare performance and examine fundamental relationship between any two equity instruments | |
| ETF Categories List of ETF categories grouped based on various criteria, such as the investment strategy or type of investments | |
| Portfolio Optimization Compute new portfolio that will generate highest expected return given your specified tolerance for risk | |
| Equity Analysis Research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities |