Aim Cardiovascular diseases (CVD) are one of the leading causes of morbidity and mortality in the global population and cause notable psychosocial and psychological repercussions, including psychological distress and cognitive impairment. This research examines the correlation between psychological distress, cognitive impairment, and disease severity in patients with chronic CVD. The study seeks to establish interrelations between these factors and functional activity, quality of life, and general health by comparing specific demographic and clinical variables. Method This cross-sectional study was conducted among 100 chronic CVD patients aged 35 and above, recruited from cardiovascular care units and outpatient clinics. The sample included 43 (43%) males and 57 (57%) females. The Perceived Stress Scale was used to assess psychological distress, the Duke Activity Status Index for functional activity, the EQ-5D-5L for health-related quality of life, and the Mini-Mental State Examination for cognitive function. Data were analyzed using IBM SPSS Statistics software version 26 (IBM Corp., Armonk, NY, USA) to perform correlation studies on stress, cognition, activities, and quality of life and to compare these results between groups based on marital status, education level, employment status, and disease duration. Results The results revealed a significant positive relationship between stress and functional activity, r = 0.521, and quality of life, r = 0.698, indicating that moderate stress levels can positively impact activity levels and perceived quality of life. The level of stress was negatively related to cognition (r = -0.318, demonstrating the toxic impact of stress. Mentally compensated participants were stressed and showed weaker cognitive results than non-compensated individuals, especially those hospitalized. Comparing stress and mental performance by marital status, employment status, and education showed that education status affected stress and cognition in different ways, and widowed and retired individuals had higher stress levels and lower cognitive scores. Conclusion This study highlights the complex interplay between psychological distress, cognitive impairment, and disease severity in chronic CVD patients. Findings emphasize the need for integrated interventions that address psychological and mental health to improve overall patient care and health-related quality of life. These findings suggest the potential for developing targeted psychological and cognitive support interventions to enhance functional activity, reduce distress, and improve quality of life in chronic CVD patients. Tailored strategies for vulnerable groups, such as widowed and retired individuals, could help mitigate stress, preserve cognitive function, and enhance health outcomes in chronic disease settings.