Correlation Between Information Services and Science Applications
Can any of the company-specific risk be diversified away by investing in both Information Services and Science Applications 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 Information Services and Science Applications into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Information Services Group and Science Applications International, you can compare the effects of market volatilities on Information Services and Science Applications 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 Information Services with a short position of Science Applications. Check out your portfolio center. Please also check ongoing floating volatility patterns of Information Services and Science Applications.
Diversification Opportunities for Information Services and Science Applications
-0.42 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Information and Science is -0.42. Overlapping area represents the amount of risk that can be diversified away by holding Information Services Group and Science Applications Internati in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Science Applications and Information Services 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 Information Services Group are associated (or correlated) with Science Applications. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Science Applications has no effect on the direction of Information Services i.e., Information Services and Science Applications go up and down completely randomly.
Pair Corralation between Information Services and Science Applications
Considering the 90-day investment horizon Information Services Group is expected to generate 0.63 times more return on investment than Science Applications. However, Information Services Group is 1.6 times less risky than Science Applications. It trades about 0.27 of its potential returns per unit of risk. Science Applications International is currently generating about -0.2 per unit of risk. If you would invest 316.00 in Information Services Group on August 28, 2024 and sell it today you would earn a total of 41.00 from holding Information Services Group or generate 12.97% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Information Services Group vs. Science Applications Internati
Performance |
| Timeline |
| Information Services |
| Science Applications |
Information Services and Science Applications Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Information Services and Science Applications
The main advantage of trading using opposite Information Services and Science Applications positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Information Services position performs unexpectedly, Science Applications 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 Science Applications will offset losses from the drop in Science Applications' long position.| Information Services vs. Formula Systems 1985 | Information Services vs. CSP Inc | Information Services vs. Nayax | Information Services vs. The Hackett Group |
| Science Applications vs. CACI International | Science Applications vs. CDW Corp | Science Applications vs. Gartner | Science Applications vs. Jack Henry Associates |
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.
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