Correlation Between Cigniti Technologies and S P

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

By analyzing existing cross correlation between Cigniti Technologies Limited and S P Apparels, you can compare the effects of market volatilities on Cigniti Technologies and S P 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 Cigniti Technologies with a short position of S P. Check out your portfolio center. Please also check ongoing floating volatility patterns of Cigniti Technologies and S P.

Diversification Opportunities for Cigniti Technologies and S P

0.05

Correlation Coefficient

Cigniti Technologies  S P

Significant diversification

The 3 months correlation between Cigniti and SPAL is 0.05. Overlapping area represents the amount of risk that can be diversified away by holding Cigniti Technologies Limited and S P Apparels in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on S P Apparels and Cigniti Technologies 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 Cigniti Technologies Limited are associated (or correlated) with S P. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of S P Apparels has no effect on the direction of Cigniti Technologies i.e., Cigniti Technologies and S P go up and down completely randomly.

Pair Corralation between Cigniti Technologies and S P

Assuming the 90 days trading horizon Cigniti Technologies is expected to generate 1.0 times less return on investment than S P. But when comparing it to its historical volatility, Cigniti Technologies Limited is 1.57 times less risky than S P. It trades about 0.11 of its potential returns per unit of risk. S P Apparels is currently generating about 0.07 of returns per unit of risk over similar time horizon. If you would invest  60,875  in S P Apparels on September 12, 2024 and sell it today you would earn a total of  33,235  from holding S P Apparels or generate 54.6% return on investment over 90 days.

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

Cigniti Technologies Limited  vs.  S P Apparels

Cigniti Technologies

Risk-Adjusted Performance

17 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Cigniti Technologies Limited are ranked lower than 17 (%) of all global equities and portfolios over the last 90 days. Despite fairly uncertain basic indicators, Cigniti Technologies demonstrated solid returns over the last few months and may actually be approaching a breakup point.

S P Apparels

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days S P Apparels has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable basic indicators, S P is not utilizing all of its potentials. The current stock price uproar, may contribute to short-horizon losses for the private investors.

Pair Trading with Cigniti Technologies and S P

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

The idea behind Cigniti Technologies Limited and S P Apparels 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 Commodity Directory module to find actively traded commodities issued by global exchanges.