Correlation Between DXC Technology and X FAB
Can any of the company-specific risk be diversified away by investing in both DXC Technology and X FAB 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 X FAB 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 X FAB Silicon Foundries, you can compare the effects of market volatilities on DXC Technology and X FAB 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 X FAB. Check out your portfolio center. Please also check ongoing floating volatility patterns of DXC Technology and X FAB.
Diversification Opportunities for DXC Technology and X FAB
-0.26 | Correlation Coefficient |
Very good diversification
The 3 months correlation between DXC and 0ROZ is -0.26. Overlapping area represents the amount of risk that can be diversified away by holding DXC Technology Co and X FAB Silicon Foundries in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on X FAB Silicon 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 X FAB. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of X FAB Silicon has no effect on the direction of DXC Technology i.e., DXC Technology and X FAB go up and down completely randomly.
Pair Corralation between DXC Technology and X FAB
Assuming the 90 days trading horizon DXC Technology Co is expected to generate 1.02 times more return on investment than X FAB. However, DXC Technology is 1.02 times more volatile than X FAB Silicon Foundries. It trades about 0.02 of its potential returns per unit of risk. X FAB Silicon Foundries is currently generating about -0.1 per unit of risk. If you would invest 2,194 in DXC Technology Co on August 27, 2024 and sell it today you would earn a total of 28.00 from holding DXC Technology Co or generate 1.28% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 99.48% |
| Values | Daily Returns |
DXC Technology Co vs. X FAB Silicon Foundries
Performance |
| Timeline |
| DXC Technology |
| X FAB Silicon |
DXC Technology and X FAB Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with DXC Technology and X FAB
The main advantage of trading using opposite DXC Technology and X FAB positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if DXC Technology position performs unexpectedly, X FAB 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 X FAB will offset losses from the drop in X FAB's long position.| DXC Technology vs. Samsung Electronics Co | DXC Technology vs. Samsung Electronics Co | DXC Technology vs. Hyundai Motor | DXC Technology vs. Toyota Motor Corp |
| X FAB vs. Zoom Video Communications | X FAB vs. Tata Steel Limited | X FAB vs. LPKF Laser Electronics | X FAB vs. Batm Advanced Communications |
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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.
Other Complementary Tools
| Portfolio Diagnostics Use generated alerts and portfolio events aggregator to diagnose current holdings | |
| Money Managers Screen money managers from public funds and ETFs managed around the world | |
| Efficient Frontier Plot and analyze your portfolio and positions against risk-return landscape of the market. | |
| Funds Screener Find actively-traded funds from around the world traded on over 30 global exchanges | |
| Instant Ratings Determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance |