Correlation Between CACI International and DXC Technology
Can any of the company-specific risk be diversified away by investing in both CACI International and DXC Technology 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 CACI International and DXC Technology into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between CACI International and DXC Technology Co, you can compare the effects of market volatilities on CACI International and DXC Technology 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 CACI International with a short position of DXC Technology. Check out your portfolio center. Please also check ongoing floating volatility patterns of CACI International and DXC Technology.
Diversification Opportunities for CACI International and DXC Technology
-0.72 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between CACI and DXC is -0.72. Overlapping area represents the amount of risk that can be diversified away by holding CACI International and DXC Technology Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on DXC Technology and CACI International 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 CACI International are associated (or correlated) with DXC Technology. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of DXC Technology has no effect on the direction of CACI International i.e., CACI International and DXC Technology go up and down completely randomly.
Pair Corralation between CACI International and DXC Technology
Given the investment horizon of 90 days CACI International is expected to generate 1.24 times less return on investment than DXC Technology. But when comparing it to its historical volatility, CACI International is 2.17 times less risky than DXC Technology. It trades about 0.11 of its potential returns per unit of risk. DXC Technology Co is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest 2,062 in DXC Technology Co on January 25, 2024 and sell it today you would earn a total of 54.00 from holding DXC Technology Co or generate 2.62% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 95.45% |
| Values | Daily Returns |
CACI International vs. DXC Technology Co
Performance |
| Timeline |
| CACI International |
| DXC Technology |
CACI International and DXC Technology Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with CACI International and DXC Technology
The main advantage of trading using opposite CACI International and DXC Technology positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CACI International position performs unexpectedly, DXC Technology 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 DXC Technology will offset losses from the drop in DXC Technology's long position.| CACI International vs. FiscalNote Holdings | CACI International vs. Innodata | CACI International vs. Aurora Innovation | CACI International vs. Conduent |
| DXC Technology vs. FiscalNote Holdings | DXC Technology vs. Innodata | DXC Technology vs. Aurora Innovation | DXC Technology vs. Conduent |
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 ETFs module to find actively traded Exchange Traded Funds (ETF) from around the world.
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