Correlation Between DXC Technology and Digimarc
Can any of the company-specific risk be diversified away by investing in both DXC Technology and Digimarc 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 DXC Technology and Digimarc into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between DXC Technology Co and Digimarc, you can compare the effects of market volatilities on DXC Technology and Digimarc 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 DXC Technology with a short position of Digimarc. Check out your portfolio center. Please also check ongoing floating volatility patterns of DXC Technology and Digimarc.
Diversification Opportunities for DXC Technology and Digimarc
0.61 | Correlation Coefficient |
Poor diversification
The 3 months correlation between DXC and Digimarc is 0.61. Overlapping area represents the amount of risk that can be diversified away by holding DXC Technology Co and Digimarc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Digimarc and DXC Technology 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 DXC Technology Co are associated (or correlated) with Digimarc. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Digimarc has no effect on the direction of DXC Technology i.e., DXC Technology and Digimarc go up and down completely randomly.
Pair Corralation between DXC Technology and Digimarc
Considering the 90-day investment horizon DXC Technology Co is expected to under-perform the Digimarc. But the stock apears to be less risky and, when comparing its historical volatility, DXC Technology Co is 1.46 times less risky than Digimarc. The stock trades about -0.01 of its potential returns per unit of risk. The Digimarc is currently generating about 0.02 of returns per unit of risk over similar time horizon. If you would invest 2,115 in Digimarc on January 27, 2024 and sell it today you would earn a total of 37.00 from holding Digimarc or generate 1.75% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 99.8% |
| Values | Daily Returns |
DXC Technology Co vs. Digimarc
Performance |
| Timeline |
| DXC Technology |
| Digimarc |
DXC Technology and Digimarc Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with DXC Technology and Digimarc
The main advantage of trading using opposite DXC Technology and Digimarc positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if DXC Technology position performs unexpectedly, Digimarc 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 Digimarc will offset losses from the drop in Digimarc's long position.| DXC Technology vs. FiscalNote Holdings | DXC Technology vs. Innodata | DXC Technology vs. Aurora Innovation | DXC Technology vs. Conduent |
| Digimarc vs. VNET Group DRC | Digimarc vs. GDS Holdings | Digimarc vs. CLARIVATE PLC | Digimarc vs. CACI International |
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 Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.
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