Correlation Between Lloyds Banking and Cognizant Technology
Can any of the company-specific risk be diversified away by investing in both Lloyds Banking 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 Lloyds Banking and Cognizant Technology into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Lloyds Banking Group and Cognizant Technology Solutions, you can compare the effects of market volatilities on Lloyds Banking 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 Lloyds Banking with a short position of Cognizant Technology. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lloyds Banking and Cognizant Technology.
Diversification Opportunities for Lloyds Banking and Cognizant Technology
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Lloyds and Cognizant is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Lloyds Banking Group and Cognizant Technology Solutions in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cognizant Technology and Lloyds Banking 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 Lloyds Banking Group 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 Lloyds Banking i.e., Lloyds Banking and Cognizant Technology go up and down completely randomly.
Pair Corralation between Lloyds Banking and Cognizant Technology
If you would invest 139,394 in Cognizant Technology Solutions on August 25, 2024 and sell it today you would earn a total of 606.00 from holding Cognizant Technology Solutions or generate 0.43% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Lloyds Banking Group vs. Cognizant Technology Solutions
Performance |
| Timeline |
| Lloyds Banking Group |
| Cognizant Technology |
Lloyds Banking and Cognizant Technology Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Lloyds Banking and Cognizant Technology
The main advantage of trading using opposite Lloyds Banking and Cognizant Technology positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lloyds Banking 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.| Lloyds Banking vs. Genworth Financial | Lloyds Banking vs. McEwen Mining | Lloyds Banking vs. Micron Technology | Lloyds Banking vs. DXC Technology |
| Cognizant Technology vs. KB Home | Cognizant Technology vs. Micron Technology | Cognizant Technology vs. Martin Marietta Materials | Cognizant Technology vs. Applied Materials |
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 Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.
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