Correlation Between Mulberry Group and Cognizant Technology
Can any of the company-specific risk be diversified away by investing in both Mulberry Group 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 Mulberry Group and Cognizant Technology into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Mulberry Group PLC and Cognizant Technology Solutions, you can compare the effects of market volatilities on Mulberry Group 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 Mulberry Group with a short position of Cognizant Technology. Check out your portfolio center. Please also check ongoing floating volatility patterns of Mulberry Group and Cognizant Technology.
Diversification Opportunities for Mulberry Group and Cognizant Technology
-0.47 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Mulberry and Cognizant is -0.47. Overlapping area represents the amount of risk that can be diversified away by holding Mulberry Group PLC and Cognizant Technology Solutions in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cognizant Technology and Mulberry Group 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 Mulberry Group PLC 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 Mulberry Group i.e., Mulberry Group and Cognizant Technology go up and down completely randomly.
Pair Corralation between Mulberry Group and Cognizant Technology
Assuming the 90 days trading horizon Mulberry Group PLC is expected to generate 0.77 times more return on investment than Cognizant Technology. However, Mulberry Group PLC is 1.3 times less risky than Cognizant Technology. It trades about -0.11 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 10,700 in Mulberry Group PLC on October 13, 2024 and sell it today you would lose (200.00) from holding Mulberry Group PLC or give up 1.87% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 95.24% |
| Values | Daily Returns |
Mulberry Group PLC vs. Cognizant Technology Solutions
Performance |
| Timeline |
| Mulberry Group PLC |
| Cognizant Technology |
Mulberry Group and Cognizant Technology Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Mulberry Group and Cognizant Technology
The main advantage of trading using opposite Mulberry Group and Cognizant Technology positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Mulberry Group 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.| Mulberry Group vs. Jupiter Fund Management | Mulberry Group vs. Coeur Mining | Mulberry Group vs. Jacquet Metal Service | Mulberry Group vs. Rheinmetall AG |
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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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.
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