Correlation Between CACI International and Fidelity National

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

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

Diversification Opportunities for CACI International and Fidelity National

0.69

Correlation Coefficient

CACI International  Fidelity National

Poor diversification

The 3 months correlation between CACI and Fidelity is 0.69. Overlapping area represents the amount of risk that can be diversified away by holding CACI International and Fidelity National Information in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fidelity National 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 Fidelity National. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Fidelity National has no effect on the direction of CACI International i.e., CACI International and Fidelity National go up and down completely randomly.

Pair Corralation between CACI International and Fidelity National

Given the investment horizon of 90 days CACI International is expected to generate 1.4 times more return on investment than Fidelity National. However, CACI International is 1.4 times more volatile than Fidelity National Information. It trades about -0.03 of its potential returns per unit of risk. Fidelity National Information is currently generating about -0.06 per unit of risk. If you would invest  40,223  in CACI International on December 29, 2024 and sell it today you would lose (2,624) from holding CACI International or give up 6.52% of portfolio value over 90 days.

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

CACI International  vs.  Fidelity National Information

CACI International

Risk-Adjusted Performance

Very Weak

Over the last 90 days CACI International has generated negative risk-adjusted returns adding no value to investors with long positions. Despite fairly strong fundamental indicators, CACI International is not utilizing all of its potentials. The newest stock price confusion, may contribute to short-horizon losses for the traders.

Fidelity National

Risk-Adjusted Performance

Very Weak

Over the last 90 days Fidelity National Information has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest weak performance, the Stock's forward indicators remain stable and the newest uproar on Wall Street may also be a sign of mid-term gains for the firm private investors.

Pair Trading with CACI International and Fidelity National

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

The idea behind CACI International and Fidelity National Information 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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.