Correlation Between Cognizant Technology and Fibra Mty

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

Diversification Opportunities for Cognizant Technology and Fibra Mty

0.29

Correlation Coefficient

Cognizant Technology  Fibra Mty

Modest diversification

The 3 months correlation between Cognizant and Fibra is 0.29. Overlapping area represents the amount of risk that can be diversified away by holding Cognizant Technology Solutions and Fibra Mty SAPI in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fibra Mty SAPI 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 Fibra Mty. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Fibra Mty SAPI has no effect on the direction of Cognizant Technology i.e., Cognizant Technology and Fibra Mty go up and down completely randomly.

Pair Corralation between Cognizant Technology and Fibra Mty

If you would invest  1,071  in Fibra Mty SAPI on October 11, 2024 and sell it today you would earn a total of  14.00  from holding Fibra Mty SAPI or generate 1.31% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	100.0%
Values	Daily Returns

Cognizant Technology Solutions  vs.  Fibra Mty SAPI

Cognizant Technology

Risk-Adjusted Performance

11 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Cognizant Technology Solutions are ranked lower than 11 (%) of all global equities and portfolios over the last 90 days. In spite of fairly strong basic indicators, Cognizant Technology is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Fibra Mty SAPI

Risk-Adjusted Performance

9 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Fibra Mty SAPI are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, Fibra Mty may actually be approaching a critical reversion point that can send shares even higher in February 2025.

Pair Trading with Cognizant Technology and Fibra Mty

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

The idea behind Cognizant Technology Solutions and Fibra Mty SAPI 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 Share Portfolio module to track or share privately all of your investments from the convenience of any device.