Correlation Between Amalphi Ag and Cognizant Technology

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

By analyzing existing cross correlation between amalphi ag and Cognizant Technology Solutions, you can compare the effects of market volatilities on Amalphi Ag 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 Amalphi Ag with a short position of Cognizant Technology. Check out your portfolio center. Please also check ongoing floating volatility patterns of Amalphi Ag and Cognizant Technology.

Diversification Opportunities for Amalphi Ag and Cognizant Technology

-0.78

Correlation Coefficient

Amalphi Ag  Cognizant Technology

Pay attention - limited upside

The 3 months correlation between Amalphi and Cognizant is -0.78. Overlapping area represents the amount of risk that can be diversified away by holding amalphi ag and Cognizant Technology Solutions in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cognizant Technology and Amalphi Ag 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 amalphi ag 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 Amalphi Ag i.e., Amalphi Ag and Cognizant Technology go up and down completely randomly.

Pair Corralation between Amalphi Ag and Cognizant Technology

Assuming the 90 days horizon amalphi ag is expected to generate 7.42 times more return on investment than Cognizant Technology. However, Amalphi Ag is 7.42 times more volatile than Cognizant Technology Solutions. It trades about 0.1 of its potential returns per unit of risk. Cognizant Technology Solutions is currently generating about 0.06 per unit of risk. If you would invest  45.00  in amalphi ag on September 12, 2024 and sell it today you would earn a total of  6.00  from holding amalphi ag or generate 13.33% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Weak
Accuracy	95.65%
Values	Daily Returns

amalphi ag  vs.  Cognizant Technology Solutions

amalphi ag

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days amalphi ag has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest fragile performance, the Stock's basic indicators remain stable and the current disturbance on Wall Street may also be a sign of long-run gains for the company stockholders.

Cognizant Technology

Risk-Adjusted Performance

7 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Cognizant Technology Solutions are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, Cognizant Technology may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Pair Trading with Amalphi Ag and Cognizant Technology

The main advantage of trading using opposite Amalphi Ag and Cognizant Technology positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Amalphi Ag 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.

The idea behind amalphi ag and Cognizant Technology Solutions 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.

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.