Correlation Between DXC Technology and Xinhua Winshare
Can any of the company-specific risk be diversified away by investing in both DXC Technology and Xinhua Winshare 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 Xinhua Winshare 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 Xinhua Winshare Publishing, you can compare the effects of market volatilities on DXC Technology and Xinhua Winshare 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 Xinhua Winshare. Check out your portfolio center. Please also check ongoing floating volatility patterns of DXC Technology and Xinhua Winshare.
Diversification Opportunities for DXC Technology and Xinhua Winshare
0.52 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between DXC and Xinhua is 0.52. Overlapping area represents the amount of risk that can be diversified away by holding DXC Technology Co and Xinhua Winshare Publishing in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Xinhua Winshare Publ 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 Xinhua Winshare. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Xinhua Winshare Publ has no effect on the direction of DXC Technology i.e., DXC Technology and Xinhua Winshare go up and down completely randomly.
Pair Corralation between DXC Technology and Xinhua Winshare
Assuming the 90 days trading horizon DXC Technology Co is expected to under-perform the Xinhua Winshare. In addition to that, DXC Technology is 1.94 times more volatile than Xinhua Winshare Publishing. It trades about -0.04 of its total potential returns per unit of risk. Xinhua Winshare Publishing is currently generating about 0.23 per unit of volatility. If you would invest 114.00 in Xinhua Winshare Publishing on September 13, 2024 and sell it today you would earn a total of 9.00 from holding Xinhua Winshare Publishing or generate 7.89% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
DXC Technology Co vs. Xinhua Winshare Publishing
Performance |
| Timeline |
| DXC Technology |
| Xinhua Winshare Publ |
DXC Technology and Xinhua Winshare Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with DXC Technology and Xinhua Winshare
The main advantage of trading using opposite DXC Technology and Xinhua Winshare positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if DXC Technology position performs unexpectedly, Xinhua Winshare 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 Xinhua Winshare will offset losses from the drop in Xinhua Winshare's long position.| DXC Technology vs. Apple Inc | DXC Technology vs. Apple Inc | DXC Technology vs. Apple Inc | DXC Technology vs. Apple Inc |
| Xinhua Winshare vs. HYDROFARM HLD GRP | Xinhua Winshare vs. Federal Agricultural Mortgage | Xinhua Winshare vs. H FARM SPA | Xinhua Winshare vs. Corporate Office Properties |
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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