Correlation Between Computer Task and DXC Technology

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Can any of the company-specific risk be diversified away by investing in both Computer Task 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 Computer Task and DXC Technology into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Computer Task Group and DXC Technology Co, you can compare the effects of market volatilities on Computer Task 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 Computer Task with a short position of DXC Technology. Check out your portfolio center. Please also check ongoing floating volatility patterns of Computer Task and DXC Technology.

Diversification Opportunities for Computer Task and DXC Technology

-0.52
  Correlation Coefficient

Excellent diversification

The 3 months correlation between Computer and DXC is -0.52. Overlapping area represents the amount of risk that can be diversified away by holding Computer Task Group and DXC Technology Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on DXC Technology and Computer Task 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 Computer Task Group 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 Computer Task i.e., Computer Task and DXC Technology go up and down completely randomly.

Pair Corralation between Computer Task and DXC Technology

If you would invest  1,050  in Computer Task Group on December 29, 2023 and sell it today you would earn a total of  0.00  from holding Computer Task Group or generate 0.0% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Against 
StrengthVery Weak
Accuracy4.55%
ValuesDaily Returns

Computer Task Group  vs.  DXC Technology Co

 Performance 
       Timeline  
Computer Task Group 

Risk-Adjusted Performance

0 of 100

 
Low
 
High
Very Weak
Over the last 90 days Computer Task Group has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable basic indicators, Computer Task is not utilizing all of its potentials. The latest stock price disturbance, may contribute to mid-run losses for the stockholders.
DXC Technology 

Risk-Adjusted Performance

0 of 100

 
Low
 
High
Very Weak
Over the last 90 days DXC Technology Co has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest weak performance, the Stock's basic indicators remain sound and the latest tumult on Wall Street may also be a sign of longer-term gains for the firm shareholders.

Computer Task and DXC Technology Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Computer Task and DXC Technology

The main advantage of trading using opposite Computer Task and DXC Technology positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Computer Task 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 Computer Task Group 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.
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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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.

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