Correlation Between AMG Advanced and DXC Technology
Can any of the company-specific risk be diversified away by investing in both AMG Advanced and DXC Technology 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 AMG Advanced and DXC Technology into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between AMG Advanced Metallurgical and DXC Technology Co, you can compare the effects of market volatilities on AMG Advanced and DXC Technology 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 AMG Advanced with a short position of DXC Technology. Check out your portfolio center. Please also check ongoing floating volatility patterns of AMG Advanced and DXC Technology.
Diversification Opportunities for AMG Advanced and DXC Technology
-0.4 | Correlation Coefficient |
Very good diversification
The 3 months correlation between AMG and DXC is -0.4. Overlapping area represents the amount of risk that can be diversified away by holding AMG Advanced Metallurgical and DXC Technology Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on DXC Technology and AMG Advanced 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 AMG Advanced Metallurgical are associated (or correlated) with DXC Technology. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of DXC Technology has no effect on the direction of AMG Advanced i.e., AMG Advanced and DXC Technology go up and down completely randomly.
Pair Corralation between AMG Advanced and DXC Technology
Assuming the 90 days trading horizon AMG Advanced is expected to generate 31.91 times less return on investment than DXC Technology. In addition to that, AMG Advanced is 1.07 times more volatile than DXC Technology Co. It trades about 0.0 of its total potential returns per unit of risk. DXC Technology Co is currently generating about 0.07 per unit of volatility. If you would invest 2,038 in DXC Technology Co on September 3, 2024 and sell it today you would earn a total of 203.00 from holding DXC Technology Co or generate 9.96% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
AMG Advanced Metallurgical vs. DXC Technology Co
Performance |
| Timeline |
| AMG Advanced Metallu |
| DXC Technology |
AMG Advanced and DXC Technology Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with AMG Advanced and DXC Technology
The main advantage of trading using opposite AMG Advanced and DXC Technology positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if AMG Advanced position performs unexpectedly, DXC Technology 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 DXC Technology will offset losses from the drop in DXC Technology's long position.| AMG Advanced vs. Catalyst Media Group | AMG Advanced vs. CATLIN GROUP | AMG Advanced vs. Magnora ASA | AMG Advanced vs. RTW Venture Fund |
| DXC Technology vs. Home Depot | DXC Technology vs. Synthomer plc | DXC Technology vs. DFS Furniture PLC | DXC Technology vs. Westlake Chemical Corp |
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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.
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