Correlation Between DXC Technology and Accenture Plc

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

By analyzing existing cross correlation between DXC Technology and Accenture plc, you can compare the effects of market volatilities on DXC Technology and Accenture Plc 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 Accenture Plc. Check out your portfolio center. Please also check ongoing floating volatility patterns of DXC Technology and Accenture Plc.

Diversification Opportunities for DXC Technology and Accenture Plc

0.8

Correlation Coefficient

DXC Technology  Accenture Plc

Very poor diversification

The 3 months correlation between DXC and Accenture is 0.8. Overlapping area represents the amount of risk that can be diversified away by holding DXC Technology and Accenture plc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Accenture plc 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 are associated (or correlated) with Accenture Plc. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Accenture plc has no effect on the direction of DXC Technology i.e., DXC Technology and Accenture Plc go up and down completely randomly.

Pair Corralation between DXC Technology and Accenture Plc

Assuming the 90 days trading horizon DXC Technology is expected to generate 0.95 times more return on investment than Accenture Plc. However, DXC Technology is 1.06 times less risky than Accenture Plc. It trades about 0.0 of its potential returns per unit of risk. Accenture plc is currently generating about -0.02 per unit of risk. If you would invest  8,374  in DXC Technology on April 21, 2025 and sell it today you would lose (91.00) from holding DXC Technology or give up 1.09% of portfolio value over 90 days.

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

DXC Technology  vs.  Accenture plc

DXC Technology

Risk-Adjusted Performance

Very Weak

Over the last 90 days DXC Technology has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong basic indicators, DXC Technology is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Accenture plc

Risk-Adjusted Performance

Very Weak

Over the last 90 days Accenture plc has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong basic indicators, Accenture Plc is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with DXC Technology and Accenture Plc

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

The idea behind DXC Technology and Accenture plc 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.

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 Stock Tickers module to use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites.