Correlation Between DXC Technology and SSP Group
Can any of the company-specific risk be diversified away by investing in both DXC Technology and SSP Group 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 SSP Group 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 SSP Group PLC, you can compare the effects of market volatilities on DXC Technology and SSP Group 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 SSP Group. Check out your portfolio center. Please also check ongoing floating volatility patterns of DXC Technology and SSP Group.
Diversification Opportunities for DXC Technology and SSP Group
0.16 | Correlation Coefficient |
Average diversification
The 3 months correlation between DXC and SSP is 0.16. Overlapping area represents the amount of risk that can be diversified away by holding DXC Technology Co and SSP Group PLC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SSP Group PLC 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 SSP Group. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SSP Group PLC has no effect on the direction of DXC Technology i.e., DXC Technology and SSP Group go up and down completely randomly.
Pair Corralation between DXC Technology and SSP Group
Assuming the 90 days trading horizon DXC Technology Co is expected to generate 1.14 times more return on investment than SSP Group. However, DXC Technology is 1.14 times more volatile than SSP Group PLC. It trades about 0.0 of its potential returns per unit of risk. SSP Group PLC is currently generating about -0.01 per unit of risk. If you would invest 2,292 in DXC Technology Co on September 14, 2024 and sell it today you would lose (137.00) from holding DXC Technology Co or give up 5.98% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 98.55% |
| Values | Daily Returns |
DXC Technology Co vs. SSP Group PLC
Performance |
| Timeline |
| DXC Technology |
| SSP Group PLC |
DXC Technology and SSP Group Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with DXC Technology and SSP Group
The main advantage of trading using opposite DXC Technology and SSP Group positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if DXC Technology position performs unexpectedly, SSP Group 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 SSP Group will offset losses from the drop in SSP Group's long position.| DXC Technology vs. Batm Advanced Communications | DXC Technology vs. Aeorema Communications Plc | DXC Technology vs. Tata Steel Limited | DXC Technology vs. Blackstone Loan Financing |
| SSP Group vs. Universal Display Corp | SSP Group vs. DXC Technology Co | SSP Group vs. Microchip Technology | SSP Group vs. Sabien Technology Group |
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 Dashboard module to portfolio dashboard that provides centralized access to all your investments.
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