Correlation Between DXC Technology and GRIT Real
Can any of the company-specific risk be diversified away by investing in both DXC Technology and GRIT Real 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 GRIT Real 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 GRIT Real Estate, you can compare the effects of market volatilities on DXC Technology and GRIT Real 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 GRIT Real. Check out your portfolio center. Please also check ongoing floating volatility patterns of DXC Technology and GRIT Real.
Diversification Opportunities for DXC Technology and GRIT Real
0.62 | Correlation Coefficient |
Poor diversification
The 3 months correlation between DXC and GRIT is 0.62. Overlapping area represents the amount of risk that can be diversified away by holding DXC Technology Co and GRIT Real Estate in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on GRIT Real Estate 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 GRIT Real. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of GRIT Real Estate has no effect on the direction of DXC Technology i.e., DXC Technology and GRIT Real go up and down completely randomly.
Pair Corralation between DXC Technology and GRIT Real
Assuming the 90 days trading horizon DXC Technology Co is expected to generate 0.77 times more return on investment than GRIT Real. However, DXC Technology Co is 1.3 times less risky than GRIT Real. It trades about 0.0 of its potential returns per unit of risk. GRIT Real Estate is currently generating about -0.06 per unit of risk. If you would invest 2,307 in DXC Technology Co on December 8, 2024 and sell it today you would lose (507.00) from holding DXC Technology Co or give up 21.98% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 99.4% |
| Values | Daily Returns |
DXC Technology Co vs. GRIT Real Estate
Performance |
| Timeline |
| DXC Technology |
| GRIT Real Estate |
DXC Technology and GRIT Real Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with DXC Technology and GRIT Real
The main advantage of trading using opposite DXC Technology and GRIT Real positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if DXC Technology position performs unexpectedly, GRIT Real 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 GRIT Real will offset losses from the drop in GRIT Real's long position.| DXC Technology vs. Jacquet Metal Service | ||
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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 Commodity Channel module to use Commodity Channel Index to analyze current equity momentum.
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