Correlation Between Qualys and Cognyte Software

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

By analyzing existing cross correlation between Qualys Inc and Cognyte Software, you can compare the effects of market volatilities on Qualys and Cognyte Software 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 Qualys with a short position of Cognyte Software. Check out your portfolio center. Please also check ongoing floating volatility patterns of Qualys and Cognyte Software.

Diversification Opportunities for Qualys and Cognyte Software

-0.37

Correlation Coefficient

Qualys  Cognyte Software

Very good diversification

The 3 months correlation between Qualys and Cognyte is -0.37. Overlapping area represents the amount of risk that can be diversified away by holding Qualys Inc and Cognyte Software in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cognyte Software and Qualys 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 Qualys Inc are associated (or correlated) with Cognyte Software. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Cognyte Software has no effect on the direction of Qualys i.e., Qualys and Cognyte Software go up and down completely randomly.

Pair Corralation between Qualys and Cognyte Software

Given the investment horizon of 90 days Qualys Inc is expected to under-perform the Cognyte Software. But the stock apears to be less risky and, when comparing its historical volatility, Qualys Inc is 1.33 times less risky than Cognyte Software. The stock trades about -0.19 of its potential returns per unit of risk. The Cognyte Software is currently generating about 0.01 of returns per unit of risk over similar time horizon. If you would invest  904.00  in Cognyte Software on November 28, 2024 and sell it today you would earn a total of  0.00  from holding Cognyte Software or generate 0.0% return on investment over 90 days.

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

Qualys Inc  vs.  Cognyte Software

Qualys Inc

Risk-Adjusted Performance

Very Weak

Over the last 90 days Qualys Inc has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of unsteady performance in the last few months, the Stock's basic indicators remain comparatively stable which may send shares a bit higher in March 2025. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.

Cognyte Software

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Cognyte Software are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain basic indicators, Cognyte Software unveiled solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Qualys and Cognyte Software

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

The idea behind Qualys Inc and Cognyte Software 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 Sectors module to list of equity sectors categorizing publicly traded companies based on their primary business activities.