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

-0.63

Correlation Coefficient

Perficient  Leidos Holdings

Excellent diversification

The 3 months correlation between Perficient and Leidos is -0.63. 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 under-perform the Leidos Holdings. In addition to that, Perficient is 2.04 times more volatile than Leidos Holdings. It trades about -0.21 of its total potential returns per unit of risk. Leidos Holdings is currently generating about 0.29 per unit of volatility. If you would invest  12,895  in Leidos Holdings on February 2, 2024 and sell it today you would earn a total of  1,324  from holding Leidos Holdings or generate 10.27% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Weak
Accuracy	95.65%
Values	Daily Returns

Perficient  vs.  Leidos Holdings

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.

Leidos Holdings

Risk-Adjusted Performance

23 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Leidos Holdings are ranked lower than 23 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively unfluctuating basic indicators, Leidos Holdings unveiled solid returns over the last few months and may actually be approaching a breakup point.

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.

The idea behind Perficient and Leidos Holdings 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 File Import module to quickly import all of your third-party portfolios from your local drive in csv format.