Correlation Between DXC Technology and CVR Energy
Can any of the company-specific risk be diversified away by investing in both DXC Technology and CVR Energy 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 CVR Energy 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 CVR Energy, you can compare the effects of market volatilities on DXC Technology and CVR Energy 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 CVR Energy. Check out your portfolio center. Please also check ongoing floating volatility patterns of DXC Technology and CVR Energy.
Diversification Opportunities for DXC Technology and CVR Energy
-0.36 | Correlation Coefficient |
Very good diversification
The 3 months correlation between DXC and CVR is -0.36. Overlapping area represents the amount of risk that can be diversified away by holding DXC Technology Co and CVR Energy in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CVR Energy 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 CVR Energy. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CVR Energy has no effect on the direction of DXC Technology i.e., DXC Technology and CVR Energy go up and down completely randomly.
Pair Corralation between DXC Technology and CVR Energy
Assuming the 90 days trading horizon DXC Technology Co is expected to generate 0.49 times more return on investment than CVR Energy. However, DXC Technology Co is 2.05 times less risky than CVR Energy. It trades about 0.15 of its potential returns per unit of risk. CVR Energy is currently generating about -0.09 per unit of risk. If you would invest 2,032 in DXC Technology Co on August 29, 2024 and sell it today you would earn a total of 222.00 from holding DXC Technology Co or generate 10.93% 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. CVR Energy
Performance |
| Timeline |
| DXC Technology |
| CVR Energy |
DXC Technology and CVR Energy Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with DXC Technology and CVR Energy
The main advantage of trading using opposite DXC Technology and CVR Energy positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if DXC Technology position performs unexpectedly, CVR Energy 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 CVR Energy will offset losses from the drop in CVR Energy's long position.| DXC Technology vs. Lendinvest PLC | DXC Technology vs. Neometals | DXC Technology vs. Coor Service Management | DXC Technology vs. Albion Technology General |
| CVR Energy vs. Bytes Technology | CVR Energy vs. DXC Technology Co | CVR Energy vs. United Airlines Holdings | CVR Energy vs. Check Point Software |
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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