Correlation Between 3M and DXC Technology
Can any of the company-specific risk be diversified away by investing in both 3M 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 3M and DXC Technology into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between 3M Company and DXC Technology, you can compare the effects of market volatilities on 3M 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 3M with a short position of DXC Technology. Check out your portfolio center. Please also check ongoing floating volatility patterns of 3M and DXC Technology.
Diversification Opportunities for 3M and DXC Technology
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between 3M and DXC is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding 3M Company and DXC Technology in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on DXC Technology and 3M 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 3M Company 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 3M i.e., 3M and DXC Technology go up and down completely randomly.
Pair Corralation between 3M and DXC Technology
If you would invest 264,000 in 3M Company on October 16, 2024 and sell it today you would earn a total of 11,000 from holding 3M Company or generate 4.17% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
3M Company vs. DXC Technology
Performance |
| Timeline |
| 3M Company |
| DXC Technology |
3M and DXC Technology Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with 3M and DXC Technology
The main advantage of trading using opposite 3M and DXC Technology positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if 3M 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.| 3M vs. DXC Technology | 3M vs. Cognizant Technology Solutions | 3M vs. McEwen Mining | 3M vs. First Majestic Silver |
| DXC Technology vs. Monster Beverage Corp | DXC Technology vs. Grupo Carso SAB | DXC Technology vs. Micron Technology | DXC Technology vs. Ameriprise Financial |
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 Financial Widgets module to easily integrated Macroaxis content with over 30 different plug-and-play financial widgets.
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