Correlation Between Fiserv and Cognizant Technology
Can any of the company-specific risk be diversified away by investing in both Fiserv and Cognizant Technology 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 Fiserv and Cognizant Technology into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Fiserv Inc and Cognizant Technology Solutions, you can compare the effects of market volatilities on Fiserv and Cognizant Technology 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 Fiserv with a short position of Cognizant Technology. Check out your portfolio center. Please also check ongoing floating volatility patterns of Fiserv and Cognizant Technology.
Diversification Opportunities for Fiserv and Cognizant Technology
0.51 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Fiserv and Cognizant is 0.51. Overlapping area represents the amount of risk that can be diversified away by holding Fiserv Inc and Cognizant Technology Solutions in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cognizant Technology and Fiserv 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 Fiserv Inc are associated (or correlated) with Cognizant Technology. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Cognizant Technology has no effect on the direction of Fiserv i.e., Fiserv and Cognizant Technology go up and down completely randomly.
Pair Corralation between Fiserv and Cognizant Technology
Assuming the 90 days trading horizon Fiserv Inc is expected to generate 10.41 times more return on investment than Cognizant Technology. However, Fiserv is 10.41 times more volatile than Cognizant Technology Solutions. It trades about 0.33 of its potential returns per unit of risk. Cognizant Technology Solutions is currently generating about 0.3 per unit of risk. If you would invest 57,594 in Fiserv Inc on September 2, 2024 and sell it today you would earn a total of 6,806 from holding Fiserv Inc or generate 11.82% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Fiserv Inc vs. Cognizant Technology Solutions
Performance |
| Timeline |
| Fiserv Inc |
| Cognizant Technology |
Fiserv and Cognizant Technology Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Fiserv and Cognizant Technology
The main advantage of trading using opposite Fiserv and Cognizant Technology positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Fiserv position performs unexpectedly, Cognizant Technology 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 Cognizant Technology will offset losses from the drop in Cognizant Technology's long position.| Fiserv vs. New Oriental Education | Fiserv vs. Micron Technology | Fiserv vs. Metalurgica Gerdau SA | Fiserv vs. MAHLE Metal Leve |
| Cognizant Technology vs. Fiserv Inc | Cognizant Technology vs. Fras le SA | Cognizant Technology vs. Energisa SA | Cognizant Technology vs. Clave Indices De |
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.
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