Correlation Between DXC Technology and Real Return

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

Diversification Opportunities for DXC Technology and Real Return

0.24

Correlation Coefficient

DXC Technology  Real Return

Modest diversification

The 3 months correlation between DXC and Real is 0.24. Overlapping area represents the amount of risk that can be diversified away by holding DXC Technology Co and Real Return Asset in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Real Return Asset 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 Real Return. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Real Return Asset has no effect on the direction of DXC Technology i.e., DXC Technology and Real Return go up and down completely randomly.

Pair Corralation between DXC Technology and Real Return

Considering the 90-day investment horizon DXC Technology Co is expected to under-perform the Real Return. In addition to that, DXC Technology is 4.4 times more volatile than Real Return Asset. It trades about -0.17 of its total potential returns per unit of risk. Real Return Asset is currently generating about 0.03 per unit of volatility. If you would invest  1,134  in Real Return Asset on April 12, 2025 and sell it today you would earn a total of  4.00  from holding Real Return Asset or generate 0.35% return on investment over 90 days.

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

DXC Technology Co  vs.  Real Return Asset

DXC Technology

Risk-Adjusted Performance

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 rather sound basic indicators, DXC Technology is not utilizing all of its potentials. The newest stock price tumult, may contribute to shorter-term losses for the shareholders.

Real Return Asset

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Real Return Asset are ranked lower than 2 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong forward indicators, Real Return is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with DXC Technology and Real Return

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

The idea behind DXC Technology Co and Real Return Asset 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 USA ETFs module to find actively traded Exchange Traded Funds (ETF) in USA.