Correlation Between Geely Automobile and DXC Technology
Can any of the company-specific risk be diversified away by investing in both Geely Automobile 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 Geely Automobile and DXC Technology into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Geely Automobile Holdings and DXC Technology Co, you can compare the effects of market volatilities on Geely Automobile 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 Geely Automobile with a short position of DXC Technology. Check out your portfolio center. Please also check ongoing floating volatility patterns of Geely Automobile and DXC Technology.
Diversification Opportunities for Geely Automobile and DXC Technology
0.41 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Geely and DXC is 0.41. Overlapping area represents the amount of risk that can be diversified away by holding Geely Automobile Holdings and DXC Technology Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on DXC Technology and Geely Automobile 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 Geely Automobile Holdings 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 Geely Automobile i.e., Geely Automobile and DXC Technology go up and down completely randomly.
Pair Corralation between Geely Automobile and DXC Technology
Assuming the 90 days horizon Geely Automobile Holdings is expected to generate 0.96 times more return on investment than DXC Technology. However, Geely Automobile Holdings is 1.04 times less risky than DXC Technology. It trades about 0.08 of its potential returns per unit of risk. DXC Technology Co is currently generating about 0.0 per unit of risk. If you would invest 90.00 in Geely Automobile Holdings on August 31, 2024 and sell it today you would earn a total of 79.00 from holding Geely Automobile Holdings or generate 87.78% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 99.74% |
| Values | Daily Returns |
Geely Automobile Holdings vs. DXC Technology Co
Performance |
| Timeline |
| Geely Automobile Holdings |
| DXC Technology |
Geely Automobile and DXC Technology Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Geely Automobile and DXC Technology
The main advantage of trading using opposite Geely Automobile and DXC Technology positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Geely Automobile 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.| Geely Automobile vs. NORWEGIAN AIR SHUT | Geely Automobile vs. Penta Ocean Construction Co | Geely Automobile vs. DAIRY FARM INTL | Geely Automobile vs. Ryanair Holdings plc |
| DXC Technology vs. INTERSHOP Communications Aktiengesellschaft | DXC Technology vs. Highlight Communications AG | DXC Technology vs. WILLIS LEASE FIN | DXC Technology vs. Verizon Communications |
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 FinTech Suite module to use AI to screen and filter profitable investment opportunities.
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