Correlation Between Perficient and Leidos Holdings
Can any of the company-specific risk be diversified away by investing in both Perficient and Leidos Holdings 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 Perficient and Leidos Holdings into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Perficient and Leidos Holdings, you can compare the effects of market volatilities on Perficient and Leidos Holdings 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 Perficient with a short position of Leidos Holdings. Check out your portfolio center. Please also check ongoing floating volatility patterns of Perficient and Leidos Holdings.
Diversification Opportunities for Perficient and Leidos Holdings
0.6 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Perficient and Leidos is 0.6. Overlapping area represents the amount of risk that can be diversified away by holding Perficient and Leidos Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Leidos Holdings and Perficient 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 Perficient are associated (or correlated) with Leidos Holdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Leidos Holdings has no effect on the direction of Perficient i.e., Perficient and Leidos Holdings go up and down completely randomly.
Pair Corralation between Perficient and Leidos Holdings
Given the investment horizon of 90 days Perficient is expected to generate 1.61 times less return on investment than Leidos Holdings. In addition to that, Perficient is 2.13 times more volatile than Leidos Holdings. It trades about 0.02 of its total potential returns per unit of risk. Leidos Holdings is currently generating about 0.06 per unit of volatility. If you would invest 10,674 in Leidos Holdings on August 24, 2024 and sell it today you would earn a total of 5,877 from holding Leidos Holdings or generate 55.06% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 92.54% |
| Values | Daily Returns |
Perficient vs. Leidos Holdings
Performance |
| Timeline |
| Perficient |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Solid
| Leidos Holdings |
Perficient and Leidos Holdings Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Perficient and Leidos Holdings
The main advantage of trading using opposite Perficient and Leidos Holdings positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Perficient position performs unexpectedly, Leidos Holdings 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 Leidos Holdings will offset losses from the drop in Leidos Holdings' long position.| Perficient vs. WNS Holdings | Perficient vs. Genpact Limited | Perficient vs. ASGN Inc | Perficient vs. CACI International |
| Leidos Holdings vs. CACI International | Leidos Holdings vs. Parsons Corp | Leidos Holdings vs. ASGN Inc | Leidos Holdings 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 Bonds Directory module to find actively traded corporate debentures issued by US companies.
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