Correlation Between Cognizant Technology and Abrdn Property

Can any of the company-specific risk be diversified away by investing in both Cognizant Technology and Abrdn Property 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 Abrdn Property 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 abrdn Property Income, you can compare the effects of market volatilities on Cognizant Technology and Abrdn Property 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 Abrdn Property. Check out your portfolio center. Please also check ongoing floating volatility patterns of Cognizant Technology and Abrdn Property.

Diversification Opportunities for Cognizant Technology and Abrdn Property

0.06

Correlation Coefficient

Cognizant Technology  Abrdn Property

Significant diversification

The 3 months correlation between Cognizant and Abrdn is 0.06. Overlapping area represents the amount of risk that can be diversified away by holding Cognizant Technology Solutions and abrdn Property Income in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on abrdn Property Income 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 Abrdn Property. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of abrdn Property Income has no effect on the direction of Cognizant Technology i.e., Cognizant Technology and Abrdn Property go up and down completely randomly.

Pair Corralation between Cognizant Technology and Abrdn Property

Assuming the 90 days trading horizon Cognizant Technology is expected to generate 48.75 times less return on investment than Abrdn Property. But when comparing it to its historical volatility, Cognizant Technology Solutions is 32.93 times less risky than Abrdn Property. It trades about 0.03 of its potential returns per unit of risk. abrdn Property Income is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest  503.00  in abrdn Property Income on October 24, 2024 and sell it today you would earn a total of  175.00  from holding abrdn Property Income or generate 34.79% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	99.2%
Values	Daily Returns

Cognizant Technology Solutions  vs.  abrdn Property Income

Cognizant Technology

Risk-Adjusted Performance

4 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Cognizant Technology Solutions are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively stable basic indicators, Cognizant Technology is not utilizing all of its potentials. The latest stock price uproar, may contribute to short-horizon losses for the private investors.

abrdn Property Income

Risk-Adjusted Performance

15 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in abrdn Property Income are ranked lower than 15 (%) of all global equities and portfolios over the last 90 days. In spite of rather unsteady technical and fundamental indicators, Abrdn Property exhibited solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Cognizant Technology and Abrdn Property

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

The idea behind Cognizant Technology Solutions and abrdn Property Income 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.

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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 AI Portfolio Architect module to use AI to generate optimal portfolios and find profitable investment opportunities.