Correlation Between GDS Holdings and CACI International
Can any of the company-specific risk be diversified away by investing in both GDS Holdings 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 GDS Holdings and CACI International into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between GDS Holdings and CACI International, you can compare the effects of market volatilities on GDS Holdings 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 GDS Holdings with a short position of CACI International. Check out your portfolio center. Please also check ongoing floating volatility patterns of GDS Holdings and CACI International.
Diversification Opportunities for GDS Holdings and CACI International
0.04 | Correlation Coefficient |
Significant diversification
The 3 months correlation between GDS and CACI is 0.04. Overlapping area represents the amount of risk that can be diversified away by holding GDS Holdings and CACI International in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CACI International and GDS Holdings 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 GDS Holdings 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 GDS Holdings i.e., GDS Holdings and CACI International go up and down completely randomly.
Pair Corralation between GDS Holdings and CACI International
Considering the 90-day investment horizon GDS Holdings is expected to generate 3.47 times more return on investment than CACI International. However, GDS Holdings is 3.47 times more volatile than CACI International. It trades about 0.02 of its potential returns per unit of risk. CACI International is currently generating about 0.07 per unit of risk. If you would invest 2,376 in GDS Holdings on October 20, 2024 and sell it today you would lose (24.00) from holding GDS Holdings or give up 1.01% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
GDS Holdings vs. CACI International
Performance |
| Timeline |
| GDS Holdings |
| CACI International |
GDS Holdings and CACI International Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with GDS Holdings and CACI International
The main advantage of trading using opposite GDS Holdings and CACI International positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if GDS Holdings 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.| GDS Holdings vs. ExlService Holdings | GDS Holdings vs. Gartner | GDS Holdings vs. VNET Group DRC | GDS Holdings vs. CLARIVATE PLC |
| 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 Balance Of Power module to check stock momentum by analyzing Balance Of Power indicator and other technical ratios.
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