Correlation Between Cognizant Technology and Creo Medical

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

Diversification Opportunities for Cognizant Technology and Creo Medical

-0.73

Correlation Coefficient

Cognizant Technology  Creo Medical

Pay attention - limited upside

The 3 months correlation between Cognizant and Creo is -0.73. Overlapping area represents the amount of risk that can be diversified away by holding Cognizant Technology Solutions and Creo Medical Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Creo Medical Group 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 Creo Medical. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Creo Medical Group has no effect on the direction of Cognizant Technology i.e., Cognizant Technology and Creo Medical go up and down completely randomly.

Pair Corralation between Cognizant Technology and Creo Medical

Assuming the 90 days trading horizon Cognizant Technology Solutions is expected to under-perform the Creo Medical. But the stock apears to be less risky and, when comparing its historical volatility, Cognizant Technology Solutions is 4.75 times less risky than Creo Medical. The stock trades about -0.3 of its potential returns per unit of risk. The Creo Medical Group is currently generating about 0.35 of returns per unit of risk over similar time horizon. If you would invest  1,425  in Creo Medical Group on October 11, 2024 and sell it today you would earn a total of  550.00  from holding Creo Medical Group or generate 38.6% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Weak
Accuracy	95.0%
Values	Daily Returns

Cognizant Technology Solutions  vs.  Creo Medical Group

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 comparatively stable basic indicators, Cognizant Technology is not utilizing all of its potentials. The newest stock price uproar, may contribute to short-horizon losses for the private investors.

Creo Medical Group

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Creo Medical Group has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest uncertain performance, the Stock's basic indicators remain stable and the newest uproar on Wall Street may also be a sign of mid-term gains for the firm private investors.

Pair Trading with Cognizant Technology and Creo Medical

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

The idea behind Cognizant Technology Solutions and Creo Medical Group 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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.