Correlation Between DXC Technology and Coca Cola

Can any of the company-specific risk be diversified away by investing in both DXC Technology and Coca Cola 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 Coca Cola 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 The Coca Cola, you can compare the effects of market volatilities on DXC Technology and Coca Cola 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 Coca Cola. Check out your portfolio center. Please also check ongoing floating volatility patterns of DXC Technology and Coca Cola.

Diversification Opportunities for DXC Technology and Coca Cola

0.25

Correlation Coefficient

DXC Technology  Coca Cola

Modest diversification

The 3 months correlation between DXC and Coca is 0.25. Overlapping area represents the amount of risk that can be diversified away by holding DXC Technology Co and The Coca Cola in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Coca Cola 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 Coca Cola. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Coca Cola has no effect on the direction of DXC Technology i.e., DXC Technology and Coca Cola go up and down completely randomly.

Pair Corralation between DXC Technology and Coca Cola

Considering the 90-day investment horizon DXC Technology Co is expected to under-perform the Coca Cola. In addition to that, DXC Technology is 2.9 times more volatile than The Coca Cola. It trades about -0.09 of its total potential returns per unit of risk. The Coca Cola is currently generating about -0.08 per unit of volatility. If you would invest  6,895  in The Coca Cola on July 9, 2025 and sell it today you would lose (285.00) from holding The Coca Cola or give up 4.13% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	100.0%
Values	Daily Returns

DXC Technology Co  vs.  The Coca Cola

DXC Technology

Risk-Adjusted Performance

Weakest

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 unsteady performance in the last few months, the Stock's basic indicators remain rather sound which may send shares a bit higher in November 2025. The latest tumult may also be a sign of longer-term up-swing for the firm shareholders.

Coca Cola

Risk-Adjusted Performance

Weakest

Over the last 90 days The Coca Cola has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of very healthy basic indicators, Coca Cola is not utilizing all of its potentials. The recent stock price disarray, may contribute to short-term losses for the investors.

Pair Trading with DXC Technology and Coca Cola

The main advantage of trading using opposite DXC Technology and Coca Cola positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if DXC Technology position performs unexpectedly, Coca Cola 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 Coca Cola will offset losses from the drop in Coca Cola's long position.

The idea behind DXC Technology Co and The Coca Cola 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 Pattern Recognition module to use different Pattern Recognition models to time the market across multiple global exchanges.