Correlation Between CACI International and Formula Systems
Can any of the company-specific risk be diversified away by investing in both CACI International and Formula 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 CACI International and Formula Systems into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between CACI International and Formula Systems 1985, you can compare the effects of market volatilities on CACI International and Formula 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 CACI International with a short position of Formula Systems. Check out your portfolio center. Please also check ongoing floating volatility patterns of CACI International and Formula Systems.
Diversification Opportunities for CACI International and Formula Systems
-0.48 | Correlation Coefficient |
Very good diversification
The 3 months correlation between CACI and Formula is -0.48. Overlapping area represents the amount of risk that can be diversified away by holding CACI International and Formula Systems 1985 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Formula Systems 1985 and CACI International 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 CACI International are associated (or correlated) with Formula Systems. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Formula Systems 1985 has no effect on the direction of CACI International i.e., CACI International and Formula Systems go up and down completely randomly.
Pair Corralation between CACI International and Formula Systems
Given the investment horizon of 90 days CACI International is expected to generate 0.52 times more return on investment than Formula Systems. However, CACI International is 1.93 times less risky than Formula Systems. It trades about 0.05 of its potential returns per unit of risk. Formula Systems 1985 is currently generating about 0.02 per unit of risk. If you would invest 30,472 in CACI International on October 25, 2024 and sell it today you would earn a total of 11,692 from holding CACI International or generate 38.37% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
CACI International vs. Formula Systems 1985
Performance |
| Timeline |
| CACI International |
| Formula Systems 1985 |
CACI International and Formula Systems Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with CACI International and Formula Systems
The main advantage of trading using opposite CACI International and Formula Systems positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CACI International position performs unexpectedly, Formula 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 Formula Systems will offset losses from the drop in Formula Systems' long position.| CACI International vs. Leidos Holdings | CACI International vs. Parsons Corp | CACI International vs. ASGN Inc | CACI International vs. ExlService Holdings |
| Formula Systems vs. CSP Inc | Formula Systems vs. Nayax | Formula Systems vs. Information Services Group | Formula Systems vs. The Hackett Group |
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 Sync Your Broker module to sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors..
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