Correlation Between DXC Technology and ZINZINO AB

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

Diversification Opportunities for DXC Technology and ZINZINO AB

-0.36

Correlation Coefficient

DXC Technology  ZINZINO AB

Very good diversification

The 3 months correlation between DXC and ZINZINO is -0.36. Overlapping area represents the amount of risk that can be diversified away by holding DXC Technology Co and ZINZINO AB B in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ZINZINO AB B 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 ZINZINO AB. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ZINZINO AB B has no effect on the direction of DXC Technology i.e., DXC Technology and ZINZINO AB go up and down completely randomly.

Pair Corralation between DXC Technology and ZINZINO AB

Assuming the 90 days trading horizon DXC Technology Co is expected to under-perform the ZINZINO AB. But the stock apears to be less risky and, when comparing its historical volatility, DXC Technology Co is 1.43 times less risky than ZINZINO AB. The stock trades about -0.06 of its potential returns per unit of risk. The ZINZINO AB B is currently generating about 0.02 of returns per unit of risk over similar time horizon. If you would invest  850.00  in ZINZINO AB B on October 10, 2024 and sell it today you would earn a total of  3.00  from holding ZINZINO AB B or generate 0.35% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

DXC Technology Co  vs.  ZINZINO AB B

DXC Technology

Risk-Adjusted Performance

4 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in DXC Technology Co are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain basic indicators, DXC Technology may actually be approaching a critical reversion point that can send shares even higher in February 2025.

ZINZINO AB B

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days ZINZINO AB B has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable basic indicators, ZINZINO AB is not utilizing all of its potentials. The latest stock price disturbance, may contribute to mid-run losses for the stockholders.

Pair Trading with DXC Technology and ZINZINO AB

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

The idea behind DXC Technology Co and ZINZINO AB B 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 Portfolio Center module to all portfolio management and optimization tools to improve performance of your portfolios.