Correlation Between Cognizant Technology and CM Hospitalar
Can any of the company-specific risk be diversified away by investing in both Cognizant Technology and CM Hospitalar 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 CM Hospitalar 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 CM Hospitalar SA, you can compare the effects of market volatilities on Cognizant Technology and CM Hospitalar 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 CM Hospitalar. Check out your portfolio center. Please also check ongoing floating volatility patterns of Cognizant Technology and CM Hospitalar.
Diversification Opportunities for Cognizant Technology and CM Hospitalar
0.3 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Cognizant and VVEO3 is 0.3. Overlapping area represents the amount of risk that can be diversified away by holding Cognizant Technology Solutions and CM Hospitalar SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CM Hospitalar SA 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 CM Hospitalar. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CM Hospitalar SA has no effect on the direction of Cognizant Technology i.e., Cognizant Technology and CM Hospitalar go up and down completely randomly.
Pair Corralation between Cognizant Technology and CM Hospitalar
Assuming the 90 days trading horizon Cognizant Technology Solutions is expected to generate 0.24 times more return on investment than CM Hospitalar. However, Cognizant Technology Solutions is 4.22 times less risky than CM Hospitalar. It trades about 0.07 of its potential returns per unit of risk. CM Hospitalar SA is currently generating about -0.13 per unit of risk. If you would invest 38,227 in Cognizant Technology Solutions on August 28, 2024 and sell it today you would earn a total of 5,106 from holding Cognizant Technology Solutions or generate 13.36% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 72.86% |
| Values | Daily Returns |
Cognizant Technology Solutions vs. CM Hospitalar SA
Performance |
| Timeline |
| Cognizant Technology |
| CM Hospitalar SA |
Cognizant Technology and CM Hospitalar Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Cognizant Technology and CM Hospitalar
The main advantage of trading using opposite Cognizant Technology and CM Hospitalar positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Cognizant Technology position performs unexpectedly, CM Hospitalar 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 CM Hospitalar will offset losses from the drop in CM Hospitalar's long position.| Cognizant Technology vs. Fras le SA | Cognizant Technology vs. Clave Indices De | Cognizant Technology vs. BTG Pactual Logstica | Cognizant Technology vs. Telefonaktiebolaget LM Ericsson |
| CM Hospitalar vs. Dell Technologies | CM Hospitalar vs. Technos SA | CM Hospitalar vs. Brpr Corporate Offices | CM Hospitalar vs. salesforce inc |
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 Fundamentals Comparison module to compare fundamentals across multiple equities to find investing opportunities.
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