Correlation Between REVO INSURANCE and Cognizant Technology
Can any of the company-specific risk be diversified away by investing in both REVO INSURANCE 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 REVO INSURANCE and Cognizant Technology into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between REVO INSURANCE SPA and Cognizant Technology Solutions, you can compare the effects of market volatilities on REVO INSURANCE 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 REVO INSURANCE with a short position of Cognizant Technology. Check out your portfolio center. Please also check ongoing floating volatility patterns of REVO INSURANCE and Cognizant Technology.
Diversification Opportunities for REVO INSURANCE and Cognizant Technology
0.85 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between REVO and Cognizant is 0.85. Overlapping area represents the amount of risk that can be diversified away by holding REVO INSURANCE SPA and Cognizant Technology Solutions in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cognizant Technology and REVO INSURANCE 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 REVO INSURANCE SPA 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 REVO INSURANCE i.e., REVO INSURANCE and Cognizant Technology go up and down completely randomly.
Pair Corralation between REVO INSURANCE and Cognizant Technology
Assuming the 90 days horizon REVO INSURANCE is expected to generate 1.35 times less return on investment than Cognizant Technology. But when comparing it to its historical volatility, REVO INSURANCE SPA is 1.33 times less risky than Cognizant Technology. It trades about 0.06 of its potential returns per unit of risk. Cognizant Technology Solutions is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest 5,082 in Cognizant Technology Solutions on September 14, 2024 and sell it today you would earn a total of 2,687 from holding Cognizant Technology Solutions or generate 52.87% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
REVO INSURANCE SPA vs. Cognizant Technology Solutions
Performance |
| Timeline |
| REVO INSURANCE SPA |
| Cognizant Technology |
REVO INSURANCE and Cognizant Technology Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with REVO INSURANCE and Cognizant Technology
The main advantage of trading using opposite REVO INSURANCE and Cognizant Technology positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if REVO INSURANCE 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.| REVO INSURANCE vs. Lyxor 1 | REVO INSURANCE vs. Xtrackers LevDAX | REVO INSURANCE vs. Xtrackers ShortDAX | REVO INSURANCE vs. Superior Plus Corp |
| Cognizant Technology vs. REVO INSURANCE SPA | Cognizant Technology vs. Quaker Chemical | Cognizant Technology vs. Ping An Insurance | Cognizant Technology vs. Selective Insurance Group |
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 Sync Your Broker module to sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors..
Other Complementary Tools
| Sectors List of equity sectors categorizing publicly traded companies based on their primary business activities | |
| Premium Stories Follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope | |
| Content Syndication Quickly integrate customizable finance content to your own investment portal | |
| Pattern Recognition Use different Pattern Recognition models to time the market across multiple global exchanges | |
| Latest Portfolios Quick portfolio dashboard that showcases your latest portfolios |