Correlation Between DXC Technology and IBEX
Can any of the company-specific risk be diversified away by investing in both DXC Technology and IBEX 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 IBEX 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 IBEX, you can compare the effects of market volatilities on DXC Technology and IBEX 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 IBEX. Check out your portfolio center. Please also check ongoing floating volatility patterns of DXC Technology and IBEX.
Diversification Opportunities for DXC Technology and IBEX
0.42 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between DXC and IBEX is 0.42. Overlapping area represents the amount of risk that can be diversified away by holding DXC Technology Co and IBEX in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on IBEX 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 IBEX. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of IBEX has no effect on the direction of DXC Technology i.e., DXC Technology and IBEX go up and down completely randomly.
Pair Corralation between DXC Technology and IBEX
Considering the 90-day investment horizon DXC Technology is expected to generate 1.02 times less return on investment than IBEX. In addition to that, DXC Technology is 1.4 times more volatile than IBEX. It trades about 0.19 of its total potential returns per unit of risk. IBEX is currently generating about 0.28 per unit of volatility. If you would invest 1,796 in IBEX on September 1, 2024 and sell it today you would earn a total of 254.00 from holding IBEX or generate 14.14% 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. IBEX
Performance |
| Timeline |
| DXC Technology |
| IBEX |
DXC Technology and IBEX Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with DXC Technology and IBEX
The main advantage of trading using opposite DXC Technology and IBEX positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if DXC Technology position performs unexpectedly, IBEX 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 IBEX will offset losses from the drop in IBEX's long position.| 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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.
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