Correlation Between COGNYTE SOFTWARE and QUALCOMM Incorporated

Can any of the company-specific risk be diversified away by investing in both COGNYTE SOFTWARE and QUALCOMM Incorporated 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 COGNYTE SOFTWARE and QUALCOMM Incorporated into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between COGNYTE SOFTWARE LTD and QUALCOMM Incorporated, you can compare the effects of market volatilities on COGNYTE SOFTWARE and QUALCOMM Incorporated 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 COGNYTE SOFTWARE with a short position of QUALCOMM Incorporated. Check out your portfolio center. Please also check ongoing floating volatility patterns of COGNYTE SOFTWARE and QUALCOMM Incorporated.

Diversification Opportunities for COGNYTE SOFTWARE and QUALCOMM Incorporated

-0.12

Correlation Coefficient

COGNYTE SOFTWARE  QUALCOMM Incorporated

Good diversification

The 3 months correlation between COGNYTE and QUALCOMM is -0.12. Overlapping area represents the amount of risk that can be diversified away by holding COGNYTE SOFTWARE LTD and QUALCOMM Incorporated in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on QUALCOMM Incorporated and COGNYTE SOFTWARE 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 COGNYTE SOFTWARE LTD are associated (or correlated) with QUALCOMM Incorporated. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of QUALCOMM Incorporated has no effect on the direction of COGNYTE SOFTWARE i.e., COGNYTE SOFTWARE and QUALCOMM Incorporated go up and down completely randomly.

Pair Corralation between COGNYTE SOFTWARE and QUALCOMM Incorporated

Assuming the 90 days horizon COGNYTE SOFTWARE LTD is expected to under-perform the QUALCOMM Incorporated. In addition to that, COGNYTE SOFTWARE is 1.93 times more volatile than QUALCOMM Incorporated. It trades about -0.04 of its total potential returns per unit of risk. QUALCOMM Incorporated is currently generating about 0.11 per unit of volatility. If you would invest  12,149  in QUALCOMM Incorporated on April 15, 2025 and sell it today you would earn a total of  1,345  from holding QUALCOMM Incorporated or generate 11.07% return on investment over 90 days.

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

COGNYTE SOFTWARE LTD  vs.  QUALCOMM Incorporated

COGNYTE SOFTWARE LTD

Risk-Adjusted Performance

Very Weak

Over the last 90 days COGNYTE SOFTWARE LTD 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.

QUALCOMM Incorporated

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in QUALCOMM Incorporated are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, QUALCOMM Incorporated may actually be approaching a critical reversion point that can send shares even higher in August 2025.

Pair Trading with COGNYTE SOFTWARE and QUALCOMM Incorporated

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

The idea behind COGNYTE SOFTWARE LTD and QUALCOMM Incorporated 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 Companies Directory module to evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals.