Correlation Between Sonasoft Corp and Cognizant Technology
Can any of the company-specific risk be diversified away by investing in both Sonasoft Corp 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 Sonasoft Corp and Cognizant Technology into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Sonasoft Corp and Cognizant Technology Solutions, you can compare the effects of market volatilities on Sonasoft Corp 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 Sonasoft Corp with a short position of Cognizant Technology. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sonasoft Corp and Cognizant Technology.
Diversification Opportunities for Sonasoft Corp and Cognizant Technology
-0.64 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Sonasoft and Cognizant is -0.64. Overlapping area represents the amount of risk that can be diversified away by holding Sonasoft Corp and Cognizant Technology Solutions in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cognizant Technology and Sonasoft Corp 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 Sonasoft Corp 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 Sonasoft Corp i.e., Sonasoft Corp and Cognizant Technology go up and down completely randomly.
Pair Corralation between Sonasoft Corp and Cognizant Technology
Given the investment horizon of 90 days Sonasoft Corp is expected to generate 21.97 times more return on investment than Cognizant Technology. However, Sonasoft Corp is 21.97 times more volatile than Cognizant Technology Solutions. It trades about 0.07 of its potential returns per unit of risk. Cognizant Technology Solutions is currently generating about 0.06 per unit of risk. If you would invest 2.80 in Sonasoft Corp on September 2, 2024 and sell it today you would lose (2.62) from holding Sonasoft Corp or give up 93.57% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 25.0% |
| Values | Daily Returns |
Sonasoft Corp vs. Cognizant Technology Solutions
Performance |
| Timeline |
| Sonasoft Corp |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| Cognizant Technology |
Sonasoft Corp and Cognizant Technology Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sonasoft Corp and Cognizant Technology
The main advantage of trading using opposite Sonasoft Corp and Cognizant Technology positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sonasoft Corp 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.| Sonasoft Corp vs. Xalles Holdings | Sonasoft Corp vs. Global Develpmts | Sonasoft Corp vs. High Wire Networks | Sonasoft Corp vs. Alternet Systems |
| Cognizant Technology vs. FiscalNote Holdings | Cognizant Technology vs. Innodata | Cognizant Technology vs. Aurora Innovation | Cognizant Technology vs. Conduent |
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 Economic Indicators module to top statistical indicators that provide insights into how an economy is performing.
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