Correlation Between Leidos Holdings and Gartner

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

By analyzing existing cross correlation between Leidos Holdings and Gartner, you can compare the effects of market volatilities on Leidos Holdings and Gartner 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 Leidos Holdings with a short position of Gartner. Check out your portfolio center. Please also check ongoing floating volatility patterns of Leidos Holdings and Gartner.

Diversification Opportunities for Leidos Holdings and Gartner

0.32

Correlation Coefficient

Leidos Holdings  Gartner

Weak diversification

The 3 months correlation between Leidos and Gartner is 0.32. Overlapping area represents the amount of risk that can be diversified away by holding Leidos Holdings and Gartner in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Gartner and Leidos Holdings 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 Leidos Holdings are associated (or correlated) with Gartner. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Gartner has no effect on the direction of Leidos Holdings i.e., Leidos Holdings and Gartner go up and down completely randomly.

Pair Corralation between Leidos Holdings and Gartner

Given the investment horizon of 90 days Leidos Holdings is expected to generate 1.25 times more return on investment than Gartner. However, Leidos Holdings is 1.25 times more volatile than Gartner. It trades about -0.04 of its potential returns per unit of risk. Gartner is currently generating about -0.15 per unit of risk. If you would invest  14,274  in Leidos Holdings on December 29, 2024 and sell it today you would lose (868.00) from holding Leidos Holdings or give up 6.08% of portfolio value over 90 days.

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

Leidos Holdings  vs.  Gartner

Leidos Holdings

Risk-Adjusted Performance

Very Weak

Over the last 90 days Leidos Holdings has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable basic indicators, Leidos Holdings is not utilizing all of its potentials. The recent stock price uproar, may contribute to short-horizon losses for the private investors.

Gartner

Risk-Adjusted Performance

Very Weak

Over the last 90 days Gartner has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of unsteady performance in the last few months, the Stock's basic indicators remain comparatively stable which may send shares a bit higher in April 2025. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.

Pair Trading with Leidos Holdings and Gartner

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

The idea behind Leidos Holdings and Gartner 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 Fundamentals Comparison module to compare fundamentals across multiple equities to find investing opportunities.