Correlation Between Nayax and DXC Technology

Can any of the company-specific risk be diversified away by investing in both Nayax and DXC Technology 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 Nayax and DXC Technology into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Nayax and DXC Technology Co, you can compare the effects of market volatilities on Nayax and DXC Technology 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 Nayax with a short position of DXC Technology. Check out your portfolio center. Please also check ongoing floating volatility patterns of Nayax and DXC Technology.

Diversification Opportunities for Nayax and DXC Technology

0.37

Correlation Coefficient

Nayax  DXC Technology

Weak diversification

The 3 months correlation between Nayax and DXC is 0.37. Overlapping area represents the amount of risk that can be diversified away by holding Nayax and DXC Technology Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on DXC Technology and Nayax 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 Nayax are associated (or correlated) with DXC Technology. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of DXC Technology has no effect on the direction of Nayax i.e., Nayax and DXC Technology go up and down completely randomly.

Pair Corralation between Nayax and DXC Technology

Given the investment horizon of 90 days Nayax is expected to generate 1.22 times more return on investment than DXC Technology. However, Nayax is 1.22 times more volatile than DXC Technology Co. It trades about 0.13 of its potential returns per unit of risk. DXC Technology Co is currently generating about 0.08 per unit of risk. If you would invest  2,372  in Nayax on September 1, 2024 and sell it today you would earn a total of  591.00  from holding Nayax or generate 24.92% return on investment over 90 days.

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

Nayax  vs.  DXC Technology Co

Nayax

Risk-Adjusted Performance

10 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Nayax are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. In spite of fairly fragile basic indicators, Nayax showed solid returns over the last few months and may actually be approaching a breakup point.

DXC Technology

Risk-Adjusted Performance

6 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in DXC Technology Co are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. In spite of rather inconsistent basic indicators, DXC Technology may actually be approaching a critical reversion point that can send shares even higher in December 2024.

Pair Trading with Nayax and DXC Technology

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

The idea behind Nayax and DXC Technology Co 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 Equity Valuation module to check real value of public entities based on technical and fundamental data.