Correlation Between WNS Holdings and Cognizant Technology
Can any of the company-specific risk be diversified away by investing in both WNS 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 WNS 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 WNS Holdings and Cognizant Technology Solutions, you can compare the effects of market volatilities on WNS 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 WNS Holdings with a short position of Cognizant Technology. Check out your portfolio center. Please also check ongoing floating volatility patterns of WNS Holdings and Cognizant Technology.
Diversification Opportunities for WNS Holdings and Cognizant Technology
0.21 | Correlation Coefficient |
Modest diversification
The 3 months correlation between WNS and Cognizant is 0.21. Overlapping area represents the amount of risk that can be diversified away by holding WNS 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 WNS 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 WNS 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 WNS Holdings i.e., WNS Holdings and Cognizant Technology go up and down completely randomly.
Pair Corralation between WNS Holdings and Cognizant Technology
Considering the 90-day investment horizon WNS Holdings is expected to generate 4.75 times less return on investment than Cognizant Technology. In addition to that, WNS Holdings is 1.57 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 0.11 per unit of volatility. If you would invest 6,634 in Cognizant Technology Solutions on August 24, 2024 and sell it today you would earn a total of 1,252 from holding Cognizant Technology Solutions or generate 18.87% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
WNS Holdings vs. Cognizant Technology Solutions
Performance |
| Timeline |
| WNS Holdings |
| Cognizant Technology |
WNS Holdings and Cognizant Technology Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with WNS Holdings and Cognizant Technology
The main advantage of trading using opposite WNS Holdings and Cognizant Technology positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if WNS 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.| WNS Holdings vs. Fidelity National Information | WNS Holdings vs. International Business Machines | WNS Holdings vs. Kyndryl Holdings | WNS Holdings vs. DXC Technology Co |
| Cognizant Technology vs. WNS Holdings | Cognizant Technology vs. CLARIVATE PLC | Cognizant Technology vs. Gartner | Cognizant Technology vs. Broadridge Financial Solutions |
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 Global Markets Map module to get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes.
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