Correlation Between DXC Technology and HEINEKEN

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

Diversification Opportunities for DXC Technology and HEINEKEN

-0.77

Correlation Coefficient

DXC Technology  HEINEKEN

Pay attention - limited upside

The 3 months correlation between DXC and HEINEKEN is -0.77. Overlapping area represents the amount of risk that can be diversified away by holding DXC Technology Co and HEINEKEN SP ADR in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on HEINEKEN SP ADR 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 HEINEKEN. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of HEINEKEN SP ADR has no effect on the direction of DXC Technology i.e., DXC Technology and HEINEKEN go up and down completely randomly.

Pair Corralation between DXC Technology and HEINEKEN

Assuming the 90 days trading horizon DXC Technology Co is expected to under-perform the HEINEKEN. In addition to that, DXC Technology is 1.1 times more volatile than HEINEKEN SP ADR. It trades about -0.13 of its total potential returns per unit of risk. HEINEKEN SP ADR is currently generating about 0.08 per unit of volatility. If you would invest  3,380  in HEINEKEN SP ADR on December 30, 2024 and sell it today you would earn a total of  280.00  from holding HEINEKEN SP ADR or generate 8.28% return on investment over 90 days.

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

DXC Technology Co  vs.  HEINEKEN SP ADR

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 unsteady performance in the last few months, the Stock's basic indicators remain comparatively stable which may send shares a bit higher in April 2025. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.

HEINEKEN SP ADR

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in HEINEKEN SP ADR are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. Despite nearly uncertain forward-looking signals, HEINEKEN may actually be approaching a critical reversion point that can send shares even higher in April 2025.

Pair Trading with DXC Technology and HEINEKEN

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

The idea behind DXC Technology Co and HEINEKEN SP ADR 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 Global Markets Map module to get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes.