Correlation Between DXC Technology and GEELY AUTOMOBILE
Can any of the company-specific risk be diversified away by investing in both DXC Technology and GEELY AUTOMOBILE 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 GEELY AUTOMOBILE 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 GEELY AUTOMOBILE, you can compare the effects of market volatilities on DXC Technology and GEELY AUTOMOBILE 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 GEELY AUTOMOBILE. Check out your portfolio center. Please also check ongoing floating volatility patterns of DXC Technology and GEELY AUTOMOBILE.
Diversification Opportunities for DXC Technology and GEELY AUTOMOBILE
0.07 | Correlation Coefficient |
Significant diversification
The 3 months correlation between DXC and GEELY is 0.07. Overlapping area represents the amount of risk that can be diversified away by holding DXC Technology Co and GEELY AUTOMOBILE in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on GEELY AUTOMOBILE 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 GEELY AUTOMOBILE. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of GEELY AUTOMOBILE has no effect on the direction of DXC Technology i.e., DXC Technology and GEELY AUTOMOBILE go up and down completely randomly.
Pair Corralation between DXC Technology and GEELY AUTOMOBILE
Assuming the 90 days trading horizon DXC Technology is expected to generate 1.52 times less return on investment than GEELY AUTOMOBILE. But when comparing it to its historical volatility, DXC Technology Co is 1.4 times less risky than GEELY AUTOMOBILE. It trades about 0.26 of its potential returns per unit of risk. GEELY AUTOMOBILE is currently generating about 0.28 of returns per unit of risk over similar time horizon. If you would invest 173.00 in GEELY AUTOMOBILE on November 8, 2024 and sell it today you would earn a total of 26.00 from holding GEELY AUTOMOBILE or generate 15.03% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
DXC Technology Co vs. GEELY AUTOMOBILE
Performance |
| Timeline |
| DXC Technology |
| GEELY AUTOMOBILE |
DXC Technology and GEELY AUTOMOBILE Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with DXC Technology and GEELY AUTOMOBILE
The main advantage of trading using opposite DXC Technology and GEELY AUTOMOBILE positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if DXC Technology position performs unexpectedly, GEELY AUTOMOBILE 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 GEELY AUTOMOBILE will offset losses from the drop in GEELY AUTOMOBILE's long position.| DXC Technology vs. Penta Ocean Construction Co | DXC Technology vs. DAIRY FARM INTL | DXC Technology vs. ALEFARM BREWING DK 05 | DXC Technology vs. TITAN MACHINERY |
| GEELY AUTOMOBILE vs. MACOM Technology Solutions | GEELY AUTOMOBILE vs. X FAB Silicon Foundries | GEELY AUTOMOBILE vs. EMBARK EDUCATION LTD | GEELY AUTOMOBILE vs. STRAYER EDUCATION |
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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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