Correlation Between DXC Technology and NEO PERFORMMAT
Can any of the company-specific risk be diversified away by investing in both DXC Technology and NEO PERFORMMAT 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 NEO PERFORMMAT 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 NEO PERFORMMAT, you can compare the effects of market volatilities on DXC Technology and NEO PERFORMMAT 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 NEO PERFORMMAT. Check out your portfolio center. Please also check ongoing floating volatility patterns of DXC Technology and NEO PERFORMMAT.
Diversification Opportunities for DXC Technology and NEO PERFORMMAT
0.37 | Correlation Coefficient |
Weak diversification
The 3 months correlation between DXC and NEO is 0.37. Overlapping area represents the amount of risk that can be diversified away by holding DXC Technology Co and NEO PERFORMMAT in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on NEO PERFORMMAT 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 NEO PERFORMMAT. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of NEO PERFORMMAT has no effect on the direction of DXC Technology i.e., DXC Technology and NEO PERFORMMAT go up and down completely randomly.
Pair Corralation between DXC Technology and NEO PERFORMMAT
Assuming the 90 days trading horizon DXC Technology Co is expected to under-perform the NEO PERFORMMAT. In addition to that, DXC Technology is 1.61 times more volatile than NEO PERFORMMAT. It trades about -0.2 of its total potential returns per unit of risk. NEO PERFORMMAT is currently generating about -0.09 per unit of volatility. If you would invest 527.00 in NEO PERFORMMAT on October 15, 2024 and sell it today you would lose (9.00) from holding NEO PERFORMMAT or give up 1.71% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
DXC Technology Co vs. NEO PERFORMMAT
Performance |
| Timeline |
| DXC Technology |
| NEO PERFORMMAT |
DXC Technology and NEO PERFORMMAT Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with DXC Technology and NEO PERFORMMAT
The main advantage of trading using opposite DXC Technology and NEO PERFORMMAT positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if DXC Technology position performs unexpectedly, NEO PERFORMMAT 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 NEO PERFORMMAT will offset losses from the drop in NEO PERFORMMAT's long position.| DXC Technology vs. TEXAS ROADHOUSE | DXC Technology vs. EVS Broadcast Equipment | DXC Technology vs. Texas Roadhouse | DXC Technology vs. Hochschild Mining plc |
| NEO PERFORMMAT vs. Soken Chemical Engineering | NEO PERFORMMAT vs. Sunny Optical Technology | NEO PERFORMMAT vs. DXC Technology Co | NEO PERFORMMAT vs. Lendlease 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 Money Managers module to screen money managers from public funds and ETFs managed around the world.
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