Correlation Between CITY OFFICE and DXC Technology
Can any of the company-specific risk be diversified away by investing in both CITY OFFICE 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 CITY OFFICE and DXC Technology into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between CITY OFFICE REIT and DXC Technology Co, you can compare the effects of market volatilities on CITY OFFICE 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 CITY OFFICE with a short position of DXC Technology. Check out your portfolio center. Please also check ongoing floating volatility patterns of CITY OFFICE and DXC Technology.
Diversification Opportunities for CITY OFFICE and DXC Technology
0.14 | Correlation Coefficient |
Average diversification
The 3 months correlation between CITY and DXC is 0.14. Overlapping area represents the amount of risk that can be diversified away by holding CITY OFFICE REIT and DXC Technology Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on DXC Technology and CITY OFFICE 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 CITY OFFICE REIT 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 CITY OFFICE i.e., CITY OFFICE and DXC Technology go up and down completely randomly.
Pair Corralation between CITY OFFICE and DXC Technology
Assuming the 90 days horizon CITY OFFICE REIT is expected to under-perform the DXC Technology. In addition to that, CITY OFFICE is 1.08 times more volatile than DXC Technology Co. It trades about -0.08 of its total potential returns per unit of risk. DXC Technology Co is currently generating about -0.02 per unit of volatility. If you would invest 2,086 in DXC Technology Co on October 30, 2024 and sell it today you would lose (43.00) from holding DXC Technology Co or give up 2.06% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
CITY OFFICE REIT vs. DXC Technology Co
Performance |
| Timeline |
| CITY OFFICE REIT |
| DXC Technology |
CITY OFFICE and DXC Technology Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with CITY OFFICE and DXC Technology
The main advantage of trading using opposite CITY OFFICE and DXC Technology positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CITY OFFICE 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.| CITY OFFICE vs. SPORT LISBOA E | CITY OFFICE vs. Air Transport Services | CITY OFFICE vs. BioNTech SE | CITY OFFICE vs. GAZTRTECHNIUADR15EO01 |
| DXC Technology vs. Apple Inc | DXC Technology vs. Apple Inc | DXC Technology vs. Apple Inc | DXC Technology vs. Apple Inc |
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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.
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