Correlation Between Target and Cognizant Technology
Can any of the company-specific risk be diversified away by investing in both Target 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 Target and Cognizant Technology into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Target and Cognizant Technology Solutions, you can compare the effects of market volatilities on Target 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 Target with a short position of Cognizant Technology. Check out your portfolio center. Please also check ongoing floating volatility patterns of Target and Cognizant Technology.
Diversification Opportunities for Target and Cognizant Technology
-0.44 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Target and Cognizant is -0.44. Overlapping area represents the amount of risk that can be diversified away by holding Target and Cognizant Technology Solutions in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cognizant Technology and Target 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 Target 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 Target i.e., Target and Cognizant Technology go up and down completely randomly.
Pair Corralation between Target and Cognizant Technology
If you would invest 43,333 in Cognizant Technology Solutions on November 1, 2024 and sell it today you would earn a total of 0.00 from holding Cognizant Technology Solutions or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Target vs. Cognizant Technology Solutions
Performance |
| Timeline |
| Target |
| Cognizant Technology |
Target and Cognizant Technology Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Target and Cognizant Technology
The main advantage of trading using opposite Target and Cognizant Technology positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Target 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.| Target vs. Broadridge Financial Solutions, | Target vs. Check Point Software | Target vs. Liberty Broadband | Target vs. Agilent Technologies |
| Cognizant Technology vs. Zoom Video Communications | Cognizant Technology vs. MAHLE Metal Leve | Cognizant Technology vs. Nordon Indstrias Metalrgicas | Cognizant Technology vs. American Airlines Group |
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 Efficient Frontier module to plot and analyze your portfolio and positions against risk-return landscape of the market..
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