Correlation Between DXC Technology and Gartner
Can any of the company-specific risk be diversified away by investing in both DXC Technology and Gartner 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 Gartner 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 Gartner, you can compare the effects of market volatilities on DXC Technology and Gartner 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 Gartner. Check out your portfolio center. Please also check ongoing floating volatility patterns of DXC Technology and Gartner.
Diversification Opportunities for DXC Technology and Gartner
-0.5 | Correlation Coefficient |
Very good diversification
The 3 months correlation between DXC and Gartner is -0.5. Overlapping area represents the amount of risk that can be diversified away by holding DXC Technology Co and Gartner in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Gartner 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 Gartner. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Gartner has no effect on the direction of DXC Technology i.e., DXC Technology and Gartner go up and down completely randomly.
Pair Corralation between DXC Technology and Gartner
Considering the 90-day investment horizon DXC Technology Co is expected to under-perform the Gartner. In addition to that, DXC Technology is 1.48 times more volatile than Gartner. It trades about -0.04 of its total potential returns per unit of risk. Gartner is currently generating about 0.1 per unit of volatility. If you would invest 46,569 in Gartner on December 30, 2023 and sell it today you would earn a total of 1,098 from holding Gartner or generate 2.36% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Very Weak |
Accuracy | 100.0% |
Values | Daily Returns |
DXC Technology Co vs. Gartner
Performance |
Timeline |
DXC Technology |
Gartner |
DXC Technology and Gartner Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with DXC Technology and Gartner
The main advantage of trading using opposite DXC Technology and Gartner positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if DXC Technology position performs unexpectedly, Gartner 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 Gartner will offset losses from the drop in Gartner's long position.DXC Technology vs. FactSet Research Systems | DXC Technology vs. CDW Corp | DXC Technology vs. Cardinal Health | DXC Technology vs. Zhihu Inc ADR |
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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.
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