Correlation Between XLMedia PLC and Cognizant Technology
Can any of the company-specific risk be diversified away by investing in both XLMedia PLC 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 XLMedia PLC and Cognizant Technology into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between XLMedia PLC and Cognizant Technology Solutions, you can compare the effects of market volatilities on XLMedia PLC 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 XLMedia PLC with a short position of Cognizant Technology. Check out your portfolio center. Please also check ongoing floating volatility patterns of XLMedia PLC and Cognizant Technology.
Diversification Opportunities for XLMedia PLC and Cognizant Technology
0.31 | Correlation Coefficient |
Weak diversification
The 3 months correlation between XLMedia and Cognizant is 0.31. Overlapping area represents the amount of risk that can be diversified away by holding XLMedia PLC and Cognizant Technology Solutions in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cognizant Technology and XLMedia PLC 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 XLMedia PLC 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 XLMedia PLC i.e., XLMedia PLC and Cognizant Technology go up and down completely randomly.
Pair Corralation between XLMedia PLC and Cognizant Technology
Assuming the 90 days trading horizon XLMedia PLC is expected to generate 1.62 times less return on investment than Cognizant Technology. In addition to that, XLMedia PLC is 4.24 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 0.04 per unit of volatility. If you would invest 6,029 in Cognizant Technology Solutions on October 11, 2024 and sell it today you would earn a total of 1,499 from holding Cognizant Technology Solutions or generate 24.86% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 99.4% |
| Values | Daily Returns |
XLMedia PLC vs. Cognizant Technology Solutions
Performance |
| Timeline |
| XLMedia PLC |
| Cognizant Technology |
XLMedia PLC and Cognizant Technology Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with XLMedia PLC and Cognizant Technology
The main advantage of trading using opposite XLMedia PLC and Cognizant Technology positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if XLMedia PLC 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.| XLMedia PLC vs. Livermore Investments Group | XLMedia PLC vs. Hochschild Mining plc | XLMedia PLC vs. Games Workshop Group | XLMedia PLC vs. Darden Restaurants |
| Cognizant Technology vs. Charter Communications Cl | Cognizant Technology vs. Scandic Hotels Group | Cognizant Technology vs. United Airlines Holdings | Cognizant Technology vs. Melia Hotels |
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 Bollinger Bands module to use Bollinger Bands indicator to analyze target price for a given investing horizon.
Other Complementary Tools
| Portfolio Center All portfolio management and optimization tools to improve performance of your portfolios | |
| Financial Widgets Easily integrated Macroaxis content with over 30 different plug-and-play financial widgets | |
| Earnings Calls Check upcoming earnings announcements updated hourly across public exchanges | |
| Fundamentals Comparison Compare fundamentals across multiple equities to find investing opportunities | |
| Sectors List of equity sectors categorizing publicly traded companies based on their primary business activities |