Correlation Between CACI International and Perficient

Can any of the company-specific risk be diversified away by investing in both CACI International and Perficient 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 Perficient into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between CACI International and Perficient, you can compare the effects of market volatilities on CACI International and Perficient 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 Perficient. Check out your portfolio center. Please also check ongoing floating volatility patterns of CACI International and Perficient.

Diversification Opportunities for CACI International and Perficient

-0.64

Correlation Coefficient

CACI International  Perficient

Excellent diversification

The 3 months correlation between CACI and Perficient is -0.64. Overlapping area represents the amount of risk that can be diversified away by holding CACI International and Perficient in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Perficient 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 Perficient. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Perficient has no effect on the direction of CACI International i.e., CACI International and Perficient go up and down completely randomly.

Pair Corralation between CACI International and Perficient

Given the investment horizon of 90 days CACI International is expected to generate 0.48 times more return on investment than Perficient. However, CACI International is 2.1 times less risky than Perficient. It trades about 0.29 of its potential returns per unit of risk. Perficient is currently generating about -0.21 per unit of risk. If you would invest  36,925  in CACI International on February 2, 2024 and sell it today you would earn a total of  3,845  from holding CACI International or generate 10.41% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Weak
Accuracy	100.0%
Values	Daily Returns

CACI International  vs.  Perficient

CACI International

Risk-Adjusted Performance

17 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in CACI International are ranked lower than 17 (%) of all global equities and portfolios over the last 90 days. Despite fairly unfluctuating fundamental indicators, CACI International demonstrated solid returns over the last few months and may actually be approaching a breakup point.

Perficient

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Perficient has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of inconsistent performance in the last few months, the Stock's technical and fundamental indicators remain comparatively stable which may send shares a bit higher in June 2024. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.

Pair Trading with CACI International and Perficient

The main advantage of trading using opposite CACI International and Perficient positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CACI International position performs unexpectedly, Perficient 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 Perficient will offset losses from the drop in Perficient's long position.

The idea behind CACI International and Perficient 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.

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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.