Correlation Between Nayax and CACI International

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

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

Diversification Opportunities for Nayax and CACI International

0.3

Correlation Coefficient

Nayax  CACI International

Weak diversification

The 3 months correlation between Nayax and CACI is 0.3. Overlapping area represents the amount of risk that can be diversified away by holding Nayax and CACI International in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CACI International and Nayax 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 Nayax are associated (or correlated) with CACI International. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CACI International has no effect on the direction of Nayax i.e., Nayax and CACI International go up and down completely randomly.

Pair Corralation between Nayax and CACI International

Given the investment horizon of 90 days Nayax is expected to generate 1.41 times more return on investment than CACI International. However, Nayax is 1.41 times more volatile than CACI International. It trades about 0.13 of its potential returns per unit of risk. CACI International is currently generating about -0.02 per unit of risk. If you would invest  2,372  in Nayax on September 3, 2024 and sell it today you would earn a total of  591.00  from holding Nayax or generate 24.92% return on investment over 90 days.

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

Nayax  vs.  CACI International

Nayax

Risk-Adjusted Performance

10 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Nayax are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. In spite of fairly fragile basic indicators, Nayax showed solid returns over the last few months and may actually be approaching a breakup point.

CACI International

Risk-Adjusted Performance

0 of 100

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.

Pair Trading with Nayax and CACI International

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

The idea behind Nayax and CACI International 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 Analyst Advice module to analyst recommendations and target price estimates broken down by several categories.