Correlation Between Sunstone Hotel and Cognizant Technology
Can any of the company-specific risk be diversified away by investing in both Sunstone Hotel 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 Sunstone Hotel and Cognizant Technology into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Sunstone Hotel Investors and Cognizant Technology Solutions, you can compare the effects of market volatilities on Sunstone Hotel 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 Sunstone Hotel with a short position of Cognizant Technology. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sunstone Hotel and Cognizant Technology.
Diversification Opportunities for Sunstone Hotel and Cognizant Technology
-0.23 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Sunstone and Cognizant is -0.23. Overlapping area represents the amount of risk that can be diversified away by holding Sunstone Hotel Investors and Cognizant Technology Solutions in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cognizant Technology and Sunstone Hotel 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 Sunstone Hotel Investors 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 Sunstone Hotel i.e., Sunstone Hotel and Cognizant Technology go up and down completely randomly.
Pair Corralation between Sunstone Hotel and Cognizant Technology
Considering the 90-day investment horizon Sunstone Hotel Investors is expected to under-perform the Cognizant Technology. But the stock apears to be less risky and, when comparing its historical volatility, Sunstone Hotel Investors is 1.07 times less risky than Cognizant Technology. The stock trades about -0.03 of its potential returns per unit of risk. The Cognizant Technology Solutions is currently generating about 0.2 of returns per unit of risk over similar time horizon. If you would invest 6,829 in Cognizant Technology Solutions on September 13, 2025 and sell it today you would earn a total of 1,493 from holding Cognizant Technology Solutions or generate 21.86% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Sunstone Hotel Investors vs. Cognizant Technology Solutions
Performance |
| Timeline |
| Sunstone Hotel Investors |
| Cognizant Technology |
Sunstone Hotel and Cognizant Technology Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sunstone Hotel and Cognizant Technology
The main advantage of trading using opposite Sunstone Hotel and Cognizant Technology positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sunstone Hotel 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.| Sunstone Hotel vs. AGNC Investment Corp | Sunstone Hotel vs. American Homes 4 | Sunstone Hotel vs. Equity Lifestyle Properties | Sunstone Hotel vs. Boston Properties |
| Cognizant Technology vs. Wipro Limited ADR | Cognizant Technology vs. Telefonaktiebolaget LM Ericsson | Cognizant Technology vs. Leidos Holdings | Cognizant Technology vs. Fidelity National Information |
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 Companies Directory module to evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals.
Other Complementary Tools
| Portfolio Holdings Check your current holdings and cash postion to detemine if your portfolio needs rebalancing | |
| Price Exposure Probability Analyze equity upside and downside potential for a given time horizon across multiple markets | |
| Portfolio Suggestion Get suggestions outside of your existing asset allocation including your own model portfolios | |
| Money Managers Screen money managers from public funds and ETFs managed around the world | |
| Investing Opportunities Build portfolios using our predefined set of ideas and optimize them against your investing preferences |