Correlation Between DXC Technology and Team Internet

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

Diversification Opportunities for DXC Technology and Team Internet

-0.41

Correlation Coefficient

DXC Technology  Team Internet

Very good diversification

The 3 months correlation between DXC and Team is -0.41. Overlapping area represents the amount of risk that can be diversified away by holding DXC Technology Co and Team Internet Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Team Internet Group 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 Team Internet. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Team Internet Group has no effect on the direction of DXC Technology i.e., DXC Technology and Team Internet go up and down completely randomly.

Pair Corralation between DXC Technology and Team Internet

If you would invest  14,396  in Team Internet Group on October 11, 2024 and sell it today you would lose (2,596) from holding Team Internet Group or give up 18.03% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	99.8%
Values	Daily Returns

DXC Technology Co  vs.  Team Internet Group

DXC Technology

Risk-Adjusted Performance

2 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in DXC Technology Co are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively stable basic indicators, DXC Technology is not utilizing all of its potentials. The newest stock price uproar, may contribute to short-horizon losses for the private investors.

Team Internet Group

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Team Internet Group has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of rather sound technical and fundamental indicators, Team Internet is not utilizing all of its potentials. The newest stock price tumult, may contribute to shorter-term losses for the shareholders.

Pair Trading with DXC Technology and Team Internet

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

The idea behind DXC Technology Co and Team Internet Group 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.

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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.