Correlation Between IShares Global and Cognizant Technology
Can any of the company-specific risk be diversified away by investing in both IShares Global 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 IShares Global and Cognizant Technology into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between iShares Global Timber and Cognizant Technology Solutions, you can compare the effects of market volatilities on IShares Global 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 IShares Global with a short position of Cognizant Technology. Check out your portfolio center. Please also check ongoing floating volatility patterns of IShares Global and Cognizant Technology.
Diversification Opportunities for IShares Global and Cognizant Technology
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between IShares and Cognizant is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding iShares Global Timber and Cognizant Technology Solutions in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cognizant Technology and IShares Global 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 iShares Global Timber 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 IShares Global i.e., IShares Global and Cognizant Technology go up and down completely randomly.
Pair Corralation between IShares Global and Cognizant Technology
Assuming the 90 days trading horizon IShares Global is expected to generate 20.53 times less return on investment than Cognizant Technology. But when comparing it to its historical volatility, iShares Global Timber is 16.05 times less risky than Cognizant Technology. It trades about 0.06 of its potential returns per unit of risk. Cognizant Technology Solutions is currently generating about 0.07 of returns per unit of risk over similar time horizon. If you would invest 109,247 in Cognizant Technology Solutions on September 12, 2024 and sell it today you would earn a total of 30,753 from holding Cognizant Technology Solutions or generate 28.15% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
iShares Global Timber vs. Cognizant Technology Solutions
Performance |
| Timeline |
| iShares Global Timber |
| Cognizant Technology |
IShares Global and Cognizant Technology Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with IShares Global and Cognizant Technology
The main advantage of trading using opposite IShares Global and Cognizant Technology positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if IShares Global 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.| IShares Global vs. iShares Trust | IShares Global vs. iShares Trust | IShares Global vs. iShares Trust | IShares Global vs. iShares Trust |
| Cognizant Technology vs. DXC Technology | Cognizant Technology vs. The Select Sector | Cognizant Technology vs. Promotora y Operadora | Cognizant Technology vs. iShares Global Timber |
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 Pattern Recognition module to use different Pattern Recognition models to time the market across multiple global exchanges.
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