Correlation Between DXC Technology and EPAM Systems
Can any of the company-specific risk be diversified away by investing in both DXC Technology and EPAM Systems 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 EPAM Systems 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 EPAM Systems, you can compare the effects of market volatilities on DXC Technology and EPAM Systems 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 EPAM Systems. Check out your portfolio center. Please also check ongoing floating volatility patterns of DXC Technology and EPAM Systems.
Diversification Opportunities for DXC Technology and EPAM Systems
0.29 | Correlation Coefficient |
Modest diversification
The 3 months correlation between DXC and EPAM is 0.29. Overlapping area represents the amount of risk that can be diversified away by holding DXC Technology Co and EPAM Systems in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on EPAM Systems 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 EPAM Systems. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of EPAM Systems has no effect on the direction of DXC Technology i.e., DXC Technology and EPAM Systems go up and down completely randomly.
Pair Corralation between DXC Technology and EPAM Systems
Considering the 90-day investment horizon DXC Technology Co is expected to generate 1.21 times more return on investment than EPAM Systems. However, DXC Technology is 1.21 times more volatile than EPAM Systems. It trades about -0.16 of its potential returns per unit of risk. EPAM Systems is currently generating about -0.44 per unit of risk. If you would invest 2,122 in DXC Technology Co on January 20, 2024 and sell it today you would lose (164.00) from holding DXC Technology Co or give up 7.73% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 95.65% |
| Values | Daily Returns |
DXC Technology Co vs. EPAM Systems
Performance |
| Timeline |
| DXC Technology |
| EPAM Systems |
DXC Technology and EPAM Systems Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with DXC Technology and EPAM Systems
The main advantage of trading using opposite DXC Technology and EPAM Systems positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if DXC Technology position performs unexpectedly, EPAM Systems 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 EPAM Systems will offset losses from the drop in EPAM Systems' long position.| DXC Technology vs. Information Services Group | DXC Technology vs. Home Bancorp | DXC Technology vs. CRA International | DXC Technology vs. Aquagold International |
| EPAM Systems vs. Information Services Group | EPAM Systems vs. Home Bancorp | EPAM Systems vs. CRA International | EPAM Systems vs. Aquagold International |
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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.
Other Complementary Tools
| Stock Screener Find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook. | |
| Portfolio Backtesting Avoid under-diversification and over-optimization by backtesting your portfolios | |
| Financial Widgets Easily integrated Macroaxis content with over 30 different plug-and-play financial widgets | |
| Cryptocurrency Center Build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency | |
| Price Transformation Use Price Transformation models to analyze the depth of different equity instruments across global markets | |
| Equity Valuation Check real value of public entities based on technical and fundamental data | |
| Companies Directory Evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals | |
| Instant Ratings Determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance | |
| Analyst Advice Analyst recommendations and target price estimates broken down by several categories | |
| Portfolio File Import Quickly import all of your third-party portfolios from your local drive in csv format | |
| Portfolio Dashboard Portfolio dashboard that provides centralized access to all your investments |