Correlation Between DXC Technology and FC Investment
Can any of the company-specific risk be diversified away by investing in both DXC Technology and FC Investment 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 FC Investment 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 FC Investment Trust, you can compare the effects of market volatilities on DXC Technology and FC Investment 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 FC Investment. Check out your portfolio center. Please also check ongoing floating volatility patterns of DXC Technology and FC Investment.
Diversification Opportunities for DXC Technology and FC Investment
-0.06 | Correlation Coefficient |
Good diversification
The 3 months correlation between DXC and FCIT is -0.06. Overlapping area represents the amount of risk that can be diversified away by holding DXC Technology Co and FC Investment Trust in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on FC Investment Trust 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 FC Investment. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of FC Investment Trust has no effect on the direction of DXC Technology i.e., DXC Technology and FC Investment go up and down completely randomly.
Pair Corralation between DXC Technology and FC Investment
Assuming the 90 days trading horizon DXC Technology Co is expected to under-perform the FC Investment. In addition to that, DXC Technology is 2.33 times more volatile than FC Investment Trust. It trades about -0.31 of its total potential returns per unit of risk. FC Investment Trust is currently generating about -0.02 per unit of volatility. If you would invest 117,200 in FC Investment Trust on November 29, 2024 and sell it today you would lose (600.00) from holding FC Investment Trust or give up 0.51% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
DXC Technology Co vs. FC Investment Trust
Performance |
| Timeline |
| DXC Technology |
| FC Investment Trust |
DXC Technology and FC Investment Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with DXC Technology and FC Investment
The main advantage of trading using opposite DXC Technology and FC Investment positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if DXC Technology position performs unexpectedly, FC Investment 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 FC Investment will offset losses from the drop in FC Investment's long position.| DXC Technology vs. Caledonia Mining | DXC Technology vs. Fulcrum Metals PLC | DXC Technology vs. Power Metal Resources | DXC Technology vs. Fortuna Silver Mines |
| FC Investment vs. Concurrent Technologies Plc | FC Investment vs. Schroders Investment Trusts | FC Investment vs. Sartorius Stedim Biotech | FC Investment vs. Monks Investment Trust |
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 Portfolio Anywhere module to track or share privately all of your investments from the convenience of any device.
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