Correlation Between Fidelity National and Cognizant Technology
Can any of the company-specific risk be diversified away by investing in both Fidelity National 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 Fidelity National and Cognizant Technology into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Fidelity National Information and Cognizant Technology Solutions, you can compare the effects of market volatilities on Fidelity National 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 Fidelity National with a short position of Cognizant Technology. Check out your portfolio center. Please also check ongoing floating volatility patterns of Fidelity National and Cognizant Technology.
Diversification Opportunities for Fidelity National and Cognizant Technology
0.68 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Fidelity and Cognizant is 0.68. Overlapping area represents the amount of risk that can be diversified away by holding Fidelity National Information and Cognizant Technology Solutions in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cognizant Technology and Fidelity National 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 Fidelity National Information 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 Fidelity National i.e., Fidelity National and Cognizant Technology go up and down completely randomly.
Pair Corralation between Fidelity National and Cognizant Technology
Assuming the 90 days trading horizon Fidelity National Information is expected to generate 1.14 times more return on investment than Cognizant Technology. However, Fidelity National is 1.14 times more volatile than Cognizant Technology Solutions. It trades about 0.11 of its potential returns per unit of risk. Cognizant Technology Solutions is currently generating about 0.12 per unit of risk. If you would invest 1,593 in Fidelity National Information on August 30, 2024 and sell it today you would earn a total of 1,456 from holding Fidelity National Information or generate 91.4% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 57.51% |
| Values | Daily Returns |
Fidelity National Information vs. Cognizant Technology Solutions
Performance |
| Timeline |
| Fidelity National |
| Cognizant Technology |
Fidelity National and Cognizant Technology Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Fidelity National and Cognizant Technology
The main advantage of trading using opposite Fidelity National and Cognizant Technology positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Fidelity National 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.| Fidelity National vs. United Rentals | Fidelity National vs. Lloyds Banking Group | Fidelity National vs. salesforce inc | Fidelity National vs. G2D Investments |
| Cognizant Technology vs. Fidelity National Information | Cognizant Technology vs. BTG Pactual Logstica | Cognizant Technology vs. Plano Plano Desenvolvimento | Cognizant Technology vs. The Procter Gamble |
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 Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.
Other Complementary Tools
| Insider Screener Find insiders across different sectors to evaluate their impact on performance | |
| Efficient Frontier Plot and analyze your portfolio and positions against risk-return landscape of the market. | |
| Portfolio Comparator Compare the composition, asset allocations and performance of any two portfolios in your account | |
| Competition Analyzer Analyze and compare many basic indicators for a group of related or unrelated entities | |
| Crypto Correlations Use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins |