Correlation Between Open Text and Rackspace Technology
Can any of the company-specific risk be diversified away by investing in both Open Text and Rackspace 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 Open Text and Rackspace Technology into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Open Text Corp and Rackspace Technology, you can compare the effects of market volatilities on Open Text and Rackspace 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 Open Text with a short position of Rackspace Technology. Check out your portfolio center. Please also check ongoing floating volatility patterns of Open Text and Rackspace Technology.
Diversification Opportunities for Open Text and Rackspace Technology
0.91 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Open and Rackspace is 0.91. Overlapping area represents the amount of risk that can be diversified away by holding Open Text Corp and Rackspace Technology in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Rackspace Technology and Open Text 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 Open Text Corp are associated (or correlated) with Rackspace Technology. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Rackspace Technology has no effect on the direction of Open Text i.e., Open Text and Rackspace Technology go up and down completely randomly.
Pair Corralation between Open Text and Rackspace Technology
Assuming the 90 days trading horizon Open Text Corp is expected to generate 0.4 times more return on investment than Rackspace Technology. However, Open Text Corp is 2.51 times less risky than Rackspace Technology. It trades about -0.44 of its potential returns per unit of risk. Rackspace Technology is currently generating about -0.38 per unit of risk. If you would invest 5,319 in Open Text Corp on November 5, 2025 and sell it today you would lose (1,935) from holding Open Text Corp or give up 36.38% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Open Text Corp vs. Rackspace Technology
Performance |
| Timeline |
| Open Text Corp |
| Rackspace Technology |
Open Text and Rackspace Technology Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Open Text and Rackspace Technology
The main advantage of trading using opposite Open Text and Rackspace Technology positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Open Text position performs unexpectedly, Rackspace 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 Rackspace Technology will offset losses from the drop in Rackspace Technology's long position.| Open Text vs. Descartes Systems Group | Open Text vs. Lumine Group | Open Text vs. Topicus | Open Text vs. Enghouse Systems |
| Rackspace Technology vs. Lesaka Technologies | Rackspace Technology vs. Repay Holdings Corp | Rackspace Technology vs. Veritone | Rackspace Technology vs. Gorilla Technology Group |
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 Portfolio Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.
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