Correlation Between DXC Technology and Finnair Oyj
Can any of the company-specific risk be diversified away by investing in both DXC Technology and Finnair Oyj 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 DXC Technology and Finnair Oyj into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between DXC Technology Co and Finnair Oyj, you can compare the effects of market volatilities on DXC Technology and Finnair Oyj 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 DXC Technology with a short position of Finnair Oyj. Check out your portfolio center. Please also check ongoing floating volatility patterns of DXC Technology and Finnair Oyj.
Diversification Opportunities for DXC Technology and Finnair Oyj
-0.24 | Correlation Coefficient |
Very good diversification
The 3 months correlation between DXC and Finnair is -0.24. Overlapping area represents the amount of risk that can be diversified away by holding DXC Technology Co and Finnair Oyj in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Finnair Oyj and DXC 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 DXC Technology Co are associated (or correlated) with Finnair Oyj. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Finnair Oyj has no effect on the direction of DXC Technology i.e., DXC Technology and Finnair Oyj go up and down completely randomly.
Pair Corralation between DXC Technology and Finnair Oyj
Assuming the 90 days trading horizon DXC Technology Co is expected to generate 1.04 times more return on investment than Finnair Oyj. However, DXC Technology is 1.04 times more volatile than Finnair Oyj. It trades about 0.27 of its potential returns per unit of risk. Finnair Oyj is currently generating about 0.21 per unit of risk. If you would invest 1,969 in DXC Technology Co on November 4, 2024 and sell it today you would earn a total of 184.00 from holding DXC Technology Co or generate 9.34% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 95.45% |
| Values | Daily Returns |
DXC Technology Co vs. Finnair Oyj
Performance |
| Timeline |
| DXC Technology |
| Finnair Oyj |
DXC Technology and Finnair Oyj Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with DXC Technology and Finnair Oyj
The main advantage of trading using opposite DXC Technology and Finnair Oyj positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if DXC Technology position performs unexpectedly, Finnair Oyj 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 Finnair Oyj will offset losses from the drop in Finnair Oyj's long position.| DXC Technology vs. Sovereign Metals | DXC Technology vs. First Class Metals | DXC Technology vs. Adriatic Metals | DXC Technology vs. European Metals Holdings |
| Finnair Oyj vs. Adriatic Metals | Finnair Oyj vs. Wheaton Precious Metals | Finnair Oyj vs. First Class Metals | Finnair Oyj vs. URU Metals |
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 Funds Screener module to find actively-traded funds from around the world traded on over 30 global exchanges.
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