Correlation Between Cognizant Technology and G Collado

Can any of the company-specific risk be diversified away by investing in both Cognizant Technology and G Collado 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 Cognizant Technology and G Collado into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Cognizant Technology Solutions and G Collado SAB, you can compare the effects of market volatilities on Cognizant Technology and G Collado 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 Cognizant Technology with a short position of G Collado. Check out your portfolio center. Please also check ongoing floating volatility patterns of Cognizant Technology and G Collado.

Diversification Opportunities for Cognizant Technology and G Collado

0.0

Correlation Coefficient

Cognizant Technology  G Collado

Pay attention - limited upside

The 3 months correlation between Cognizant and COLLADO is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Cognizant Technology Solutions and G Collado SAB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on G Collado SAB and Cognizant Technology 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 Cognizant Technology Solutions are associated (or correlated) with G Collado. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of G Collado SAB has no effect on the direction of Cognizant Technology i.e., Cognizant Technology and G Collado go up and down completely randomly.

Pair Corralation between Cognizant Technology and G Collado

If you would invest  110,500  in Cognizant Technology Solutions on March 3, 2024 and sell it today you would earn a total of  6,628  from holding Cognizant Technology Solutions or generate 6.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

Cognizant Technology Solutions  vs.  G Collado SAB

Cognizant Technology

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Cognizant Technology Solutions has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest weak performance, the Stock's basic indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the company investors.

G Collado SAB

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days G Collado SAB has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of very healthy basic indicators, G Collado is not utilizing all of its potentials. The latest stock price disarray, may contribute to short-term losses for the investors.

Pair Trading with Cognizant Technology and G Collado

The main advantage of trading using opposite Cognizant Technology and G Collado positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Cognizant Technology position performs unexpectedly, G Collado 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 G Collado will offset losses from the drop in G Collado's long position.

The idea behind Cognizant Technology Solutions and G Collado SAB pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.