Correlation Between DXC Technology and United Internet
Can any of the company-specific risk be diversified away by investing in both DXC Technology and United Internet 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 United Internet 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 United Internet AG, you can compare the effects of market volatilities on DXC Technology and United Internet 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 United Internet. Check out your portfolio center. Please also check ongoing floating volatility patterns of DXC Technology and United Internet.
Diversification Opportunities for DXC Technology and United Internet
-0.36 | Correlation Coefficient |
Very good diversification
The 3 months correlation between DXC and United is -0.36. Overlapping area represents the amount of risk that can be diversified away by holding DXC Technology Co and United Internet AG in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on United Internet AG 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 United Internet. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of United Internet AG has no effect on the direction of DXC Technology i.e., DXC Technology and United Internet go up and down completely randomly.
Pair Corralation between DXC Technology and United Internet
Assuming the 90 days trading horizon DXC Technology Co is expected to generate 0.97 times more return on investment than United Internet. However, DXC Technology Co is 1.03 times less risky than United Internet. It trades about 0.13 of its potential returns per unit of risk. United Internet AG is currently generating about -0.25 per unit of risk. If you would invest 2,073 in DXC Technology Co on August 30, 2024 and sell it today you would earn a total of 181.00 from holding DXC Technology Co or generate 8.73% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
DXC Technology Co vs. United Internet AG
Performance |
| Timeline |
| DXC Technology |
| United Internet AG |
DXC Technology and United Internet Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with DXC Technology and United Internet
The main advantage of trading using opposite DXC Technology and United Internet positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if DXC Technology position performs unexpectedly, United Internet 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 United Internet will offset losses from the drop in United Internet's long position.| DXC Technology vs. Tungsten West PLC | DXC Technology vs. Argo Group Limited | DXC Technology vs. Hardide PLC | DXC Technology vs. Versarien PLC |
| United Internet vs. Cizzle Biotechnology Holdings | United Internet vs. International Biotechnology Trust | United Internet vs. PureTech Health plc | United Internet vs. Optima Health plc |
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 Commodity Channel module to use Commodity Channel Index to analyze current equity momentum.
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