Correlation Between DXC Technology and CTEEP Companhia

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

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

Diversification Opportunities for DXC Technology and CTEEP Companhia

0.41

Correlation Coefficient

DXC Technology  CTEEP Companhia

Very weak diversification

The 3 months correlation between DXC and CTEEP is 0.41. Overlapping area represents the amount of risk that can be diversified away by holding DXC Technology and CTEEP Companhia in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CTEEP Companhia 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 CTEEP Companhia. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CTEEP Companhia has no effect on the direction of DXC Technology i.e., DXC Technology and CTEEP Companhia go up and down completely randomly.

Pair Corralation between DXC Technology and CTEEP Companhia

Assuming the 90 days trading horizon DXC Technology is expected to under-perform the CTEEP Companhia. In addition to that, DXC Technology is 1.53 times more volatile than CTEEP Companhia. It trades about 0.0 of its total potential returns per unit of risk. CTEEP Companhia is currently generating about 0.01 per unit of volatility. If you would invest  2,241  in CTEEP Companhia on April 21, 2025 and sell it today you would earn a total of  3.00  from holding CTEEP Companhia or generate 0.13% return on investment over 90 days.

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

DXC Technology  vs.  CTEEP Companhia

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.

CTEEP Companhia

Risk-Adjusted Performance

Very Weak

Over the last 90 days CTEEP Companhia has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable basic indicators, CTEEP Companhia is not utilizing all of its potentials. The current stock price uproar, may contribute to short-horizon losses for the private investors.

Pair Trading with DXC Technology and CTEEP Companhia

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

The idea behind DXC Technology and CTEEP Companhia 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 Share Portfolio module to track or share privately all of your investments from the convenience of any device.