Correlation Between Fujitsu and CACI International
Can any of the company-specific risk be diversified away by investing in both Fujitsu 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 Fujitsu and CACI International into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Fujitsu Limited and CACI International, you can compare the effects of market volatilities on Fujitsu 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 Fujitsu with a short position of CACI International. Check out your portfolio center. Please also check ongoing floating volatility patterns of Fujitsu and CACI International.
Diversification Opportunities for Fujitsu and CACI International
0.04 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Fujitsu and CACI is 0.04. Overlapping area represents the amount of risk that can be diversified away by holding Fujitsu Limited and CACI International in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CACI International and Fujitsu 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 Fujitsu Limited 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 Fujitsu i.e., Fujitsu and CACI International go up and down completely randomly.
Pair Corralation between Fujitsu and CACI International
Assuming the 90 days horizon Fujitsu Limited is expected to generate 2.93 times more return on investment than CACI International. However, Fujitsu is 2.93 times more volatile than CACI International. It trades about 0.04 of its potential returns per unit of risk. CACI International is currently generating about 0.07 per unit of risk. If you would invest 1,201 in Fujitsu Limited on August 30, 2024 and sell it today you would earn a total of 535.00 from holding Fujitsu Limited or generate 44.55% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 99.8% |
| Values | Daily Returns |
Fujitsu Limited vs. CACI International
Performance |
| Timeline |
| Fujitsu Limited |
| CACI International |
Fujitsu and CACI International Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Fujitsu and CACI International
The main advantage of trading using opposite Fujitsu and CACI International positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Fujitsu 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.The idea behind Fujitsu Limited and CACI International 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.| 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 Portfolio Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.
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