Correlation Between FiscalNote Holdings and Cognizant Technology
Can any of the company-specific risk be diversified away by investing in both FiscalNote Holdings 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 FiscalNote Holdings and Cognizant Technology into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between FiscalNote Holdings and Cognizant Technology Solutions, you can compare the effects of market volatilities on FiscalNote Holdings 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 FiscalNote Holdings with a short position of Cognizant Technology. Check out your portfolio center. Please also check ongoing floating volatility patterns of FiscalNote Holdings and Cognizant Technology.
Diversification Opportunities for FiscalNote Holdings and Cognizant Technology
-0.34 | Correlation Coefficient |
Very good diversification
The 3 months correlation between FiscalNote and Cognizant is -0.34. Overlapping area represents the amount of risk that can be diversified away by holding FiscalNote Holdings and Cognizant Technology Solutions in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cognizant Technology and FiscalNote Holdings 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 FiscalNote Holdings 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 FiscalNote Holdings i.e., FiscalNote Holdings and Cognizant Technology go up and down completely randomly.
Pair Corralation between FiscalNote Holdings and Cognizant Technology
Given the investment horizon of 90 days FiscalNote Holdings is expected to generate 1.58 times less return on investment than Cognizant Technology. In addition to that, FiscalNote Holdings is 4.68 times more volatile than Cognizant Technology Solutions. It trades about 0.01 of its total potential returns per unit of risk. Cognizant Technology Solutions is currently generating about 0.06 per unit of volatility. If you would invest 6,148 in Cognizant Technology Solutions on August 27, 2024 and sell it today you would earn a total of 1,806 from holding Cognizant Technology Solutions or generate 29.38% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
FiscalNote Holdings vs. Cognizant Technology Solutions
Performance |
| Timeline |
| FiscalNote Holdings |
| Cognizant Technology |
FiscalNote Holdings and Cognizant Technology Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with FiscalNote Holdings and Cognizant Technology
The main advantage of trading using opposite FiscalNote Holdings and Cognizant Technology positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if FiscalNote Holdings 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.| FiscalNote Holdings vs. Innodata | FiscalNote Holdings vs. International Business Machines | FiscalNote Holdings vs. Aurora Innovation | FiscalNote Holdings vs. BigBearai Holdings |
| Cognizant Technology vs. Data Storage Corp | Cognizant Technology vs. Usio Inc | Cognizant Technology vs. ARB IOT Group | Cognizant Technology vs. FiscalNote Holdings |
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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.
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