Correlation Between DXC Technology and CT Global
Can any of the company-specific risk be diversified away by investing in both DXC Technology and CT Global 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 CT Global 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 CT Global Managed, you can compare the effects of market volatilities on DXC Technology and CT Global 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 CT Global. Check out your portfolio center. Please also check ongoing floating volatility patterns of DXC Technology and CT Global.
Diversification Opportunities for DXC Technology and CT Global
-0.37 | Correlation Coefficient |
Very good diversification
The 3 months correlation between DXC and CMPG is -0.37. Overlapping area represents the amount of risk that can be diversified away by holding DXC Technology Co and CT Global Managed in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CT Global Managed 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 CT Global. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CT Global Managed has no effect on the direction of DXC Technology i.e., DXC Technology and CT Global go up and down completely randomly.
Pair Corralation between DXC Technology and CT Global
Assuming the 90 days trading horizon DXC Technology Co is expected to under-perform the CT Global. In addition to that, DXC Technology is 11.11 times more volatile than CT Global Managed. It trades about -0.44 of its total potential returns per unit of risk. CT Global Managed is currently generating about -0.35 per unit of volatility. If you would invest 26,700 in CT Global Managed on December 6, 2024 and sell it today you would lose (400.00) from holding CT Global Managed or give up 1.5% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 95.65% |
| Values | Daily Returns |
DXC Technology Co vs. CT Global Managed
Performance |
| Timeline |
| DXC Technology |
| CT Global Managed |
DXC Technology and CT Global Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with DXC Technology and CT Global
The main advantage of trading using opposite DXC Technology and CT Global positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if DXC Technology position performs unexpectedly, CT Global 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 CT Global will offset losses from the drop in CT Global's long position.| DXC Technology vs. Waste Management | ||
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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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.
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