Correlation Between Advanced Medical and Cognizant Technology
Can any of the company-specific risk be diversified away by investing in both Advanced Medical and Cognizant Technology 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 Advanced Medical and Cognizant Technology into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Advanced Medical Solutions and Cognizant Technology Solutions, you can compare the effects of market volatilities on Advanced Medical and Cognizant Technology 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 Advanced Medical with a short position of Cognizant Technology. Check out your portfolio center. Please also check ongoing floating volatility patterns of Advanced Medical and Cognizant Technology.
Diversification Opportunities for Advanced Medical and Cognizant Technology
-0.39 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Advanced and Cognizant is -0.39. Overlapping area represents the amount of risk that can be diversified away by holding Advanced Medical Solutions and Cognizant Technology Solutions in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cognizant Technology and Advanced Medical 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 Advanced Medical Solutions are associated (or correlated) with Cognizant Technology. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Cognizant Technology has no effect on the direction of Advanced Medical i.e., Advanced Medical and Cognizant Technology go up and down completely randomly.
Pair Corralation between Advanced Medical and Cognizant Technology
Assuming the 90 days trading horizon Advanced Medical is expected to generate 1.16 times less return on investment than Cognizant Technology. But when comparing it to its historical volatility, Advanced Medical Solutions is 1.28 times less risky than Cognizant Technology. It trades about 0.07 of its potential returns per unit of risk. Cognizant Technology Solutions is currently generating about 0.07 of returns per unit of risk over similar time horizon. If you would invest 6,128 in Cognizant Technology Solutions on September 2, 2025 and sell it today you would earn a total of 505.00 from holding Cognizant Technology Solutions or generate 8.24% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Advanced Medical Solutions vs. Cognizant Technology Solutions
Performance |
| Timeline |
| Advanced Medical Sol |
| Cognizant Technology |
Advanced Medical and Cognizant Technology Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Advanced Medical and Cognizant Technology
The main advantage of trading using opposite Advanced Medical and Cognizant Technology positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Advanced Medical position performs unexpectedly, Cognizant Technology 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 Cognizant Technology will offset losses from the drop in Cognizant Technology's long position.| Advanced Medical vs. COFFEE HOLDING | Advanced Medical vs. PRINCIPAL FINANCIAL | Advanced Medical vs. BANK OF CHINA | Advanced Medical vs. NorAm Drilling AS |
| Cognizant Technology vs. Mitsubishi Materials | Cognizant Technology vs. Southwest Airlines Co | Cognizant Technology vs. Singapore Airlines Limited | Cognizant Technology vs. EMBARK EDUCATION LTD |
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 Bonds Directory module to find actively traded corporate debentures issued by US companies.
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