Correlation Between DXC Technology and Ametek
Can any of the company-specific risk be diversified away by investing in both DXC Technology and Ametek 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 Ametek 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 Ametek Inc, you can compare the effects of market volatilities on DXC Technology and Ametek 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 Ametek. Check out your portfolio center. Please also check ongoing floating volatility patterns of DXC Technology and Ametek.
Diversification Opportunities for DXC Technology and Ametek
0.69 | Correlation Coefficient |
Poor diversification
The 3 months correlation between DXC and Ametek is 0.69. Overlapping area represents the amount of risk that can be diversified away by holding DXC Technology Co and Ametek Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ametek Inc 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 Ametek. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ametek Inc has no effect on the direction of DXC Technology i.e., DXC Technology and Ametek go up and down completely randomly.
Pair Corralation between DXC Technology and Ametek
Assuming the 90 days trading horizon DXC Technology Co is expected to under-perform the Ametek. In addition to that, DXC Technology is 1.9 times more volatile than Ametek Inc. It trades about -0.23 of its total potential returns per unit of risk. Ametek Inc is currently generating about -0.35 per unit of volatility. If you would invest 18,746 in Ametek Inc on October 14, 2024 and sell it today you would lose (1,086) from holding Ametek Inc or give up 5.79% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
DXC Technology Co vs. Ametek Inc
Performance |
| Timeline |
| DXC Technology |
| Ametek Inc |
DXC Technology and Ametek Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with DXC Technology and Ametek
The main advantage of trading using opposite DXC Technology and Ametek positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if DXC Technology position performs unexpectedly, Ametek 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 Ametek will offset losses from the drop in Ametek's long position.| DXC Technology vs. Aeorema Communications Plc | DXC Technology vs. Cairo Communication SpA | DXC Technology vs. Spirent Communications plc | DXC Technology vs. Zegona Communications Plc |
| Ametek vs. Adriatic Metals | Ametek vs. Jacquet Metal Service | Ametek vs. DXC Technology Co | Ametek vs. Vitec Software Group |
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 Efficient Frontier module to plot and analyze your portfolio and positions against risk-return landscape of the market..
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