Correlation Between CDW Corp and DXC Technology
Can any of the company-specific risk be diversified away by investing in both CDW Corp 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 CDW Corp and DXC Technology into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between CDW Corp and DXC Technology Co, you can compare the effects of market volatilities on CDW Corp 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 CDW Corp with a short position of DXC Technology. Check out your portfolio center. Please also check ongoing floating volatility patterns of CDW Corp and DXC Technology.
Diversification Opportunities for CDW Corp and DXC Technology
0.03 | Correlation Coefficient |
Significant diversification
The 3 months correlation between CDW and DXC is 0.03. Overlapping area represents the amount of risk that can be diversified away by holding CDW Corp and DXC Technology Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on DXC Technology and CDW Corp 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 CDW Corp 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 CDW Corp i.e., CDW Corp and DXC Technology go up and down completely randomly.
Pair Corralation between CDW Corp and DXC Technology
Considering the 90-day investment horizon CDW Corp is expected to generate 0.55 times more return on investment than DXC Technology. However, CDW Corp is 1.81 times less risky than DXC Technology. It trades about 0.55 of its potential returns per unit of risk. DXC Technology Co is currently generating about 0.22 per unit of risk. If you would invest 17,929 in CDW Corp on November 5, 2024 and sell it today you would earn a total of 1,985 from holding CDW Corp or generate 11.07% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
CDW Corp vs. DXC Technology Co
Performance |
| Timeline |
| CDW Corp |
| DXC Technology |
CDW Corp and DXC Technology Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with CDW Corp and DXC Technology
The main advantage of trading using opposite CDW Corp and DXC Technology positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CDW Corp 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.| CDW Corp vs. CACI International | CDW Corp vs. Jack Henry Associates | CDW Corp vs. Broadridge Financial Solutions | CDW Corp vs. ExlService Holdings |
| DXC Technology vs. CACI International | DXC Technology vs. CDW Corp | DXC Technology vs. Jack Henry Associates | DXC Technology vs. Broadridge Financial Solutions |
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 Optimizer module to use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio .
Other Complementary Tools
| Cryptocurrency Center Build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency | |
| Fundamentals Comparison Compare fundamentals across multiple equities to find investing opportunities | |
| Pair Correlation Compare performance and examine fundamental relationship between any two equity instruments | |
| Idea Analyzer Analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas | |
| Aroon Oscillator Analyze current equity momentum using Aroon Oscillator and other momentum ratios |