Correlation Between Cognizant Technology and Qualys
Can any of the company-specific risk be diversified away by investing in both Cognizant Technology and Qualys 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 Qualys 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 Qualys Inc, you can compare the effects of market volatilities on Cognizant Technology and Qualys 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 Qualys. Check out your portfolio center. Please also check ongoing floating volatility patterns of Cognizant Technology and Qualys.
Diversification Opportunities for Cognizant Technology and Qualys
0.89 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Cognizant and Qualys is 0.89. Overlapping area represents the amount of risk that can be diversified away by holding Cognizant Technology Solutions and Qualys Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Qualys Inc 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 Qualys. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Qualys Inc has no effect on the direction of Cognizant Technology i.e., Cognizant Technology and Qualys go up and down completely randomly.
Pair Corralation between Cognizant Technology and Qualys
Given the investment horizon of 90 days Cognizant Technology Solutions is expected to generate 0.75 times more return on investment than Qualys. However, Cognizant Technology Solutions is 1.34 times less risky than Qualys. It trades about 0.05 of its potential returns per unit of risk. Qualys Inc is currently generating about -0.04 per unit of risk. If you would invest 7,094 in Cognizant Technology Solutions on June 5, 2025 and sell it today you would earn a total of 84.00 from holding Cognizant Technology Solutions or generate 1.18% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Cognizant Technology Solutions vs. Qualys Inc
Performance |
| Timeline |
| Cognizant Technology |
| Qualys Inc |
Cognizant Technology and Qualys Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Cognizant Technology and Qualys
The main advantage of trading using opposite Cognizant Technology and Qualys positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Cognizant Technology position performs unexpectedly, Qualys 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 Qualys will offset losses from the drop in Qualys' long position.| Cognizant Technology vs. Infosys Ltd ADR | Cognizant Technology vs. Gartner | Cognizant Technology vs. Broadridge Financial Solutions | Cognizant Technology vs. Fiserv, |
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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.
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