Correlation Between Accenture Plc and DXC Technology
Can any of the company-specific risk be diversified away by investing in both Accenture Plc 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 Accenture Plc and DXC Technology into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Accenture plc and DXC Technology Co, you can compare the effects of market volatilities on Accenture Plc 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 Accenture Plc with a short position of DXC Technology. Check out your portfolio center. Please also check ongoing floating volatility patterns of Accenture Plc and DXC Technology.
Diversification Opportunities for Accenture Plc and DXC Technology
0.39 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Accenture and DXC is 0.39. Overlapping area represents the amount of risk that can be diversified away by holding Accenture plc and DXC Technology Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on DXC Technology and Accenture Plc 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 Accenture plc 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 Accenture Plc i.e., Accenture Plc and DXC Technology go up and down completely randomly.
Pair Corralation between Accenture Plc and DXC Technology
Considering the 90-day investment horizon Accenture plc is expected to generate 0.46 times more return on investment than DXC Technology. However, Accenture plc is 2.18 times less risky than DXC Technology. It trades about 0.03 of its potential returns per unit of risk. DXC Technology Co is currently generating about -0.02 per unit of risk. If you would invest 29,715 in Accenture plc on January 24, 2024 and sell it today you would earn a total of 1,973 from holding Accenture plc or generate 6.64% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 99.52% |
| Values | Daily Returns |
Accenture plc vs. DXC Technology Co
Performance |
| Timeline |
| Accenture plc |
| DXC Technology |
Accenture Plc and DXC Technology Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Accenture Plc and DXC Technology
The main advantage of trading using opposite Accenture Plc and DXC Technology positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Accenture Plc 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.| Accenture Plc vs. FiscalNote Holdings | Accenture Plc vs. Innodata | Accenture Plc vs. Aurora Innovation | Accenture Plc vs. Conduent |
| DXC Technology vs. FiscalNote Holdings | DXC Technology vs. Innodata | DXC Technology vs. Aurora Innovation | DXC Technology vs. Conduent |
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 AI Investment Finder module to use AI to screen and filter profitable investment opportunities.
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