Correlation Between Cognizant Technology and CACI International
Can any of the company-specific risk be diversified away by investing in both Cognizant Technology and CACI International 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 Cognizant Technology and CACI International into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Cognizant Technology Solutions and CACI International, you can compare the effects of market volatilities on Cognizant Technology and CACI International 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 Cognizant Technology with a short position of CACI International. Check out your portfolio center. Please also check ongoing floating volatility patterns of Cognizant Technology and CACI International.
Diversification Opportunities for Cognizant Technology and CACI International
0.12 | Correlation Coefficient |
Average diversification
The 3 months correlation between Cognizant and CACI is 0.12. Overlapping area represents the amount of risk that can be diversified away by holding Cognizant Technology Solutions and CACI International in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CACI International and Cognizant 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 Cognizant Technology Solutions are associated (or correlated) with CACI International. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CACI International has no effect on the direction of Cognizant Technology i.e., Cognizant Technology and CACI International go up and down completely randomly.
Pair Corralation between Cognizant Technology and CACI International
Given the investment horizon of 90 days Cognizant Technology is expected to generate 1.2 times less return on investment than CACI International. In addition to that, Cognizant Technology is 1.04 times more volatile than CACI International. It trades about 0.06 of its total potential returns per unit of risk. CACI International is currently generating about 0.07 per unit of volatility. If you would invest 30,482 in CACI International on August 28, 2024 and sell it today you would earn a total of 15,953 from holding CACI International or generate 52.34% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Cognizant Technology Solutions vs. CACI International
Performance |
| Timeline |
| Cognizant Technology |
| CACI International |
Cognizant Technology and CACI International Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Cognizant Technology and CACI International
The main advantage of trading using opposite Cognizant Technology and CACI International positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Cognizant Technology position performs unexpectedly, CACI International 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 CACI International will offset losses from the drop in CACI International's long position.| Cognizant Technology vs. Wipro Limited ADR | Cognizant Technology vs. Accenture plc | Cognizant Technology vs. Gartner | Cognizant Technology vs. CACI International |
| CACI International vs. Leidos Holdings | CACI International vs. Parsons Corp | CACI International vs. ASGN Inc | CACI International vs. ExlService Holdings |
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 Investing Opportunities module to build portfolios using our predefined set of ideas and optimize them against your investing preferences.
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