Correlation Between DXC Technology and IBEX

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

Diversification Opportunities for DXC Technology and IBEX

-0.14

Correlation Coefficient

DXC Technology  IBEX

Good diversification

The 3 months correlation between DXC and IBEX is -0.14. Overlapping area represents the amount of risk that can be diversified away by holding DXC Technology Co and IBEX in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on IBEX 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 IBEX. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of IBEX has no effect on the direction of DXC Technology i.e., DXC Technology and IBEX go up and down completely randomly.

Pair Corralation between DXC Technology and IBEX

Considering the 90-day investment horizon DXC Technology Co is expected to under-perform the IBEX. In addition to that, DXC Technology is 1.0 times more volatile than IBEX. It trades about -0.01 of its total potential returns per unit of risk. IBEX is currently generating about 0.0 per unit of volatility. If you would invest  2,620  in IBEX on October 27, 2024 and sell it today you would lose (391.00) from holding IBEX or give up 14.92% of portfolio value over 90 days.

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

DXC Technology Co  vs.  IBEX

DXC Technology

Risk-Adjusted Performance

3 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in DXC Technology Co are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. In spite of rather sound basic indicators, DXC Technology is not utilizing all of its potentials. The recent stock price tumult, may contribute to shorter-term losses for the shareholders.

IBEX

Risk-Adjusted Performance

13 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in IBEX are ranked lower than 13 (%) of all global equities and portfolios over the last 90 days. In spite of fairly fragile technical and fundamental indicators, IBEX showed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with DXC Technology and IBEX

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

The idea behind DXC Technology Co and IBEX 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 Competition Analyzer module to analyze and compare many basic indicators for a group of related or unrelated entities.