Correlation Between CEVA and DXC Technology
Can any of the company-specific risk be diversified away by investing in both CEVA 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 CEVA and DXC Technology into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between CEVA Inc and DXC Technology Co, you can compare the effects of market volatilities on CEVA 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 CEVA with a short position of DXC Technology. Check out your portfolio center. Please also check ongoing floating volatility patterns of CEVA and DXC Technology.
Diversification Opportunities for CEVA and DXC Technology
0.84 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between CEVA and DXC is 0.84. Overlapping area represents the amount of risk that can be diversified away by holding CEVA Inc and DXC Technology Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on DXC Technology and CEVA 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 CEVA Inc 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 CEVA i.e., CEVA and DXC Technology go up and down completely randomly.
Pair Corralation between CEVA and DXC Technology
Assuming the 90 days trading horizon CEVA Inc is expected to generate 1.14 times more return on investment than DXC Technology. However, CEVA is 1.14 times more volatile than DXC Technology Co. It trades about 0.02 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 2,687 in CEVA Inc on September 5, 2024 and sell it today you would earn a total of 113.00 from holding CEVA Inc or generate 4.21% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 99.8% |
| Values | Daily Returns |
CEVA Inc vs. DXC Technology Co
Performance |
| Timeline |
| CEVA Inc |
| DXC Technology |
CEVA and DXC Technology Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with CEVA and DXC Technology
The main advantage of trading using opposite CEVA and DXC Technology positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CEVA 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.| CEVA vs. DXC Technology Co | CEVA vs. Align Technology | CEVA vs. Computer And Technologies | CEVA vs. Jacquet Metal Service |
| DXC Technology vs. Apple Inc | DXC Technology vs. Apple Inc | DXC Technology vs. Apple Inc | DXC Technology vs. Apple Inc |
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 Equity Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.
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