Correlation Between IBEX and DXC Technology
Can any of the company-specific risk be diversified away by investing in both IBEX 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 IBEX and DXC Technology into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between IBEX and DXC Technology Co, you can compare the effects of market volatilities on IBEX 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 IBEX with a short position of DXC Technology. Check out your portfolio center. Please also check ongoing floating volatility patterns of IBEX and DXC Technology.
Diversification Opportunities for IBEX and DXC Technology
0.42 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between IBEX and DXC is 0.42. Overlapping area represents the amount of risk that can be diversified away by holding IBEX and DXC Technology Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on DXC Technology and IBEX 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 IBEX 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 IBEX i.e., IBEX and DXC Technology go up and down completely randomly.
Pair Corralation between IBEX and DXC Technology
Given the investment horizon of 90 days IBEX is expected to under-perform the DXC Technology. In addition to that, IBEX is 1.01 times more volatile than DXC Technology Co. It trades about -0.01 of its total potential returns per unit of risk. DXC Technology Co is currently generating about 0.0 per unit of volatility. If you would invest 2,725 in DXC Technology Co on September 3, 2024 and sell it today you would lose (474.00) from holding DXC Technology Co or give up 17.39% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
IBEX vs. DXC Technology Co
Performance |
| Timeline |
| IBEX |
| DXC Technology |
IBEX and DXC Technology Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with IBEX and DXC Technology
The main advantage of trading using opposite IBEX and DXC Technology positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if IBEX 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.The idea behind IBEX and DXC Technology Co pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.| DXC Technology vs. Accenture plc | DXC Technology vs. International Business Machines | DXC Technology vs. ASGN Inc | DXC Technology vs. ExlService Holdings |
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 Content Syndication module to quickly integrate customizable finance content to your own investment portal.
Other Complementary Tools
| Fundamental Analysis View fundamental data based on most recent published financial statements | |
| Equity Valuation Check real value of public entities based on technical and fundamental data | |
| Idea Breakdown Analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes | |
| Pattern Recognition Use different Pattern Recognition models to time the market across multiple global exchanges | |
| Portfolio Dashboard Portfolio dashboard that provides centralized access to all your investments |