Correlation Between DXC Technology and GreenX Metals
Can any of the company-specific risk be diversified away by investing in both DXC Technology and GreenX Metals 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 GreenX Metals 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 GreenX Metals, you can compare the effects of market volatilities on DXC Technology and GreenX Metals 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 GreenX Metals. Check out your portfolio center. Please also check ongoing floating volatility patterns of DXC Technology and GreenX Metals.
Diversification Opportunities for DXC Technology and GreenX Metals
-0.17 | Correlation Coefficient |
Good diversification
The 3 months correlation between DXC and GreenX is -0.17. Overlapping area represents the amount of risk that can be diversified away by holding DXC Technology Co and GreenX Metals in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on GreenX Metals 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 GreenX Metals. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of GreenX Metals has no effect on the direction of DXC Technology i.e., DXC Technology and GreenX Metals go up and down completely randomly.
Pair Corralation between DXC Technology and GreenX Metals
Assuming the 90 days trading horizon DXC Technology Co is expected to generate 1.23 times more return on investment than GreenX Metals. However, DXC Technology is 1.23 times more volatile than GreenX Metals. It trades about 0.16 of its potential returns per unit of risk. GreenX Metals is currently generating about -0.24 per unit of risk. If you would invest 2,026 in DXC Technology Co on September 1, 2024 and sell it today you would earn a total of 215.00 from holding DXC Technology Co or generate 10.61% 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. GreenX Metals
Performance |
| Timeline |
| DXC Technology |
| GreenX Metals |
DXC Technology and GreenX Metals Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with DXC Technology and GreenX Metals
The main advantage of trading using opposite DXC Technology and GreenX Metals positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if DXC Technology position performs unexpectedly, GreenX Metals 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 GreenX Metals will offset losses from the drop in GreenX Metals' long position.| DXC Technology vs. Orient Telecoms | DXC Technology vs. Future Metals NL | DXC Technology vs. AMG Advanced Metallurgical | DXC Technology vs. Sovereign Metals |
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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 Bollinger Bands module to use Bollinger Bands indicator to analyze target price for a given investing horizon.
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