Correlation Between DXC Technology and VNET Group
Can any of the company-specific risk be diversified away by investing in both DXC Technology and VNET Group 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 VNET Group 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 VNET Group DRC, you can compare the effects of market volatilities on DXC Technology and VNET Group 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 VNET Group. Check out your portfolio center. Please also check ongoing floating volatility patterns of DXC Technology and VNET Group.
Diversification Opportunities for DXC Technology and VNET Group
-0.01 | Correlation Coefficient |
Good diversification
The 3 months correlation between DXC and VNET is -0.01. Overlapping area represents the amount of risk that can be diversified away by holding DXC Technology Co and VNET Group DRC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on VNET Group DRC 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 VNET Group. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of VNET Group DRC has no effect on the direction of DXC Technology i.e., DXC Technology and VNET Group go up and down completely randomly.
Pair Corralation between DXC Technology and VNET Group
Considering the 90-day investment horizon DXC Technology Co is expected to generate 0.81 times more return on investment than VNET Group. However, DXC Technology Co is 1.23 times less risky than VNET Group. It trades about -0.18 of its potential returns per unit of risk. VNET Group DRC is currently generating about -0.59 per unit of risk. If you would invest 1,738 in DXC Technology Co on January 14, 2025 and sell it today you would lose (293.00) from holding DXC Technology Co or give up 16.86% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
DXC Technology Co vs. VNET Group DRC
Performance |
| Timeline |
| DXC Technology |
| VNET Group DRC |
DXC Technology and VNET Group Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with DXC Technology and VNET Group
The main advantage of trading using opposite DXC Technology and VNET Group positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if DXC Technology position performs unexpectedly, VNET Group 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 VNET Group will offset losses from the drop in VNET Group's long position.| DXC Technology vs. CACI International | ||
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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 Alpha Finder module to use alpha and beta coefficients to find investment opportunities after accounting for the risk.
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