Correlation Between MAHLE Metal and DXC Technology
Can any of the company-specific risk be diversified away by investing in both MAHLE Metal 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 MAHLE Metal and DXC Technology into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between MAHLE Metal Leve and DXC Technology, you can compare the effects of market volatilities on MAHLE Metal 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 MAHLE Metal with a short position of DXC Technology. Check out your portfolio center. Please also check ongoing floating volatility patterns of MAHLE Metal and DXC Technology.
Diversification Opportunities for MAHLE Metal and DXC Technology
-0.59 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between MAHLE and DXC is -0.59. Overlapping area represents the amount of risk that can be diversified away by holding MAHLE Metal Leve and DXC Technology in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on DXC Technology and MAHLE Metal 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 MAHLE Metal Leve 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 MAHLE Metal i.e., MAHLE Metal and DXC Technology go up and down completely randomly.
Pair Corralation between MAHLE Metal and DXC Technology
Assuming the 90 days trading horizon MAHLE Metal Leve is expected to generate 0.81 times more return on investment than DXC Technology. However, MAHLE Metal Leve is 1.24 times less risky than DXC Technology. It trades about 0.25 of its potential returns per unit of risk. DXC Technology is currently generating about -0.22 per unit of risk. If you would invest 2,618 in MAHLE Metal Leve on November 4, 2024 and sell it today you would earn a total of 217.00 from holding MAHLE Metal Leve or generate 8.29% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 95.45% |
| Values | Daily Returns |
MAHLE Metal Leve vs. DXC Technology
Performance |
| Timeline |
| MAHLE Metal Leve |
| DXC Technology |
MAHLE Metal and DXC Technology Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with MAHLE Metal and DXC Technology
The main advantage of trading using opposite MAHLE Metal and DXC Technology positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if MAHLE Metal 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.| MAHLE Metal vs. Tupy SA | MAHLE Metal vs. Engie Brasil Energia | MAHLE Metal vs. Grendene SA | MAHLE Metal vs. M Dias Branco |
| DXC Technology vs. Paycom Software | DXC Technology vs. Chunghwa Telecom Co, | DXC Technology vs. Verizon Communications | DXC Technology vs. Unity Software |
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 Bollinger Bands module to use Bollinger Bands indicator to analyze target price for a given investing horizon.
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