Correlation Between Cognizant Technology and Jupiter Fund

Can any of the company-specific risk be diversified away by investing in both Cognizant Technology and Jupiter Fund 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 Jupiter Fund 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 Jupiter Fund Management, you can compare the effects of market volatilities on Cognizant Technology and Jupiter Fund 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 Jupiter Fund. Check out your portfolio center. Please also check ongoing floating volatility patterns of Cognizant Technology and Jupiter Fund.

Diversification Opportunities for Cognizant Technology and Jupiter Fund

0.41

Correlation Coefficient

Cognizant Technology  Jupiter Fund

Very weak diversification

The 3 months correlation between Cognizant and Jupiter is 0.41. Overlapping area represents the amount of risk that can be diversified away by holding Cognizant Technology Solutions and Jupiter Fund Management in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Jupiter Fund Management 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 Jupiter Fund. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Jupiter Fund Management has no effect on the direction of Cognizant Technology i.e., Cognizant Technology and Jupiter Fund go up and down completely randomly.

Pair Corralation between Cognizant Technology and Jupiter Fund

Assuming the 90 days trading horizon Cognizant Technology Solutions is expected to generate 0.66 times more return on investment than Jupiter Fund. However, Cognizant Technology Solutions is 1.51 times less risky than Jupiter Fund. It trades about 0.03 of its potential returns per unit of risk. Jupiter Fund Management is currently generating about -0.01 per unit of risk. If you would invest  7,640  in Cognizant Technology Solutions on August 10, 2024 and sell it today you would earn a total of  422.00  from holding Cognizant Technology Solutions or generate 5.52% return on investment over 90 days.

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

Cognizant Technology Solutions  vs.  Jupiter Fund Management

Cognizant Technology

Risk-Adjusted Performance

10 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Cognizant Technology Solutions are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain basic indicators, Cognizant Technology may actually be approaching a critical reversion point that can send shares even higher in December 2024.

Jupiter Fund Management

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Jupiter Fund Management are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. In spite of rather sound technical and fundamental indicators, Jupiter Fund is not utilizing all of its potentials. The latest stock price tumult, may contribute to shorter-term losses for the shareholders.

Pair Trading with Cognizant Technology and Jupiter Fund

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

The idea behind Cognizant Technology Solutions and Jupiter Fund Management 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 Transaction History module to view history of all your transactions and understand their impact on performance.