Correlation Between Iron Mountain and Cognizant Technology
Can any of the company-specific risk be diversified away by investing in both Iron Mountain 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 Iron Mountain and Cognizant Technology into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Iron Mountain Incorporated and Cognizant Technology Solutions, you can compare the effects of market volatilities on Iron Mountain 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 Iron Mountain with a short position of Cognizant Technology. Check out your portfolio center. Please also check ongoing floating volatility patterns of Iron Mountain and Cognizant Technology.
Diversification Opportunities for Iron Mountain and Cognizant Technology
0.59 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Iron and Cognizant is 0.59. Overlapping area represents the amount of risk that can be diversified away by holding Iron Mountain Incorporated and Cognizant Technology Solutions in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cognizant Technology and Iron Mountain 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 Iron Mountain Incorporated 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 Iron Mountain i.e., Iron Mountain and Cognizant Technology go up and down completely randomly.
Pair Corralation between Iron Mountain and Cognizant Technology
Assuming the 90 days trading horizon Iron Mountain Incorporated is expected to under-perform the Cognizant Technology. In addition to that, Iron Mountain is 17.2 times more volatile than Cognizant Technology Solutions. It trades about -0.02 of its total potential returns per unit of risk. Cognizant Technology Solutions is currently generating about 0.26 per unit of volatility. If you would invest 42,957 in Cognizant Technology Solutions on August 30, 2024 and sell it today you would earn a total of 376.00 from holding Cognizant Technology Solutions or generate 0.88% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Iron Mountain Incorporated vs. Cognizant Technology Solutions
Performance |
| Timeline |
| Iron Mountain |
| Cognizant Technology |
Iron Mountain and Cognizant Technology Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Iron Mountain and Cognizant Technology
The main advantage of trading using opposite Iron Mountain and Cognizant Technology positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Iron Mountain 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.| Iron Mountain vs. Global X Funds | Iron Mountain vs. Costco Wholesale | Iron Mountain vs. Warner Music Group | Iron Mountain vs. UnitedHealth Group Incorporated |
| 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 Companies Directory module to evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals.
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