Correlation Between Taylor Maritime and Cognizant Technology
Can any of the company-specific risk be diversified away by investing in both Taylor Maritime 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 Taylor Maritime and Cognizant Technology into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Taylor Maritime Investments and Cognizant Technology Solutions, you can compare the effects of market volatilities on Taylor Maritime 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 Taylor Maritime with a short position of Cognizant Technology. Check out your portfolio center. Please also check ongoing floating volatility patterns of Taylor Maritime and Cognizant Technology.
Diversification Opportunities for Taylor Maritime and Cognizant Technology
-0.33 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Taylor and Cognizant is -0.33. Overlapping area represents the amount of risk that can be diversified away by holding Taylor Maritime Investments and Cognizant Technology Solutions in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cognizant Technology and Taylor Maritime 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 Taylor Maritime Investments 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 Taylor Maritime i.e., Taylor Maritime and Cognizant Technology go up and down completely randomly.
Pair Corralation between Taylor Maritime and Cognizant Technology
Assuming the 90 days trading horizon Taylor Maritime Investments is expected to under-perform the Cognizant Technology. But the stock apears to be less risky and, when comparing its historical volatility, Taylor Maritime Investments is 1.28 times less risky than Cognizant Technology. The stock trades about -0.21 of its potential returns per unit of risk. The Cognizant Technology Solutions is currently generating about 0.2 of returns per unit of risk over similar time horizon. If you would invest 7,494 in Cognizant Technology Solutions on September 4, 2024 and sell it today you would earn a total of 583.00 from holding Cognizant Technology Solutions or generate 7.78% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Taylor Maritime Investments vs. Cognizant Technology Solutions
Performance |
| Timeline |
| Taylor Maritime Inve |
| Cognizant Technology |
Taylor Maritime and Cognizant Technology Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Taylor Maritime and Cognizant Technology
The main advantage of trading using opposite Taylor Maritime and Cognizant Technology positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Taylor Maritime 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.| Taylor Maritime vs. Samsung Electronics Co | Taylor Maritime vs. Samsung Electronics Co | Taylor Maritime vs. Hyundai Motor | Taylor Maritime vs. Toyota Motor Corp |
| Cognizant Technology vs. Samsung Electronics Co | Cognizant Technology vs. Samsung Electronics Co | Cognizant Technology vs. Hyundai Motor | Cognizant Technology vs. Toyota Motor Corp |
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 Investing Opportunities module to build portfolios using our predefined set of ideas and optimize them against your investing preferences.
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