Correlation Between CACI International and Autodesk

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

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

Diversification Opportunities for CACI International and Autodesk

0.16

Correlation Coefficient

CACI International  Autodesk

Average diversification

The 3 months correlation between CACI and Autodesk is 0.16. Overlapping area represents the amount of risk that can be diversified away by holding CACI International and Autodesk in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Autodesk 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 Autodesk. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Autodesk has no effect on the direction of CACI International i.e., CACI International and Autodesk go up and down completely randomly.

Pair Corralation between CACI International and Autodesk

Given the investment horizon of 90 days CACI International is expected to generate 0.52 times more return on investment than Autodesk. However, CACI International is 1.93 times less risky than Autodesk. It trades about -0.06 of its potential returns per unit of risk. Autodesk is currently generating about -0.55 per unit of risk. If you would invest  36,870  in CACI International on January 20, 2024 and sell it today you would lose (464.00) from holding CACI International or give up 1.26% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	95.45%
Values	Daily Returns

CACI International  vs.  Autodesk

CACI International

Risk-Adjusted Performance

7 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in CACI International are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. Despite fairly strong fundamental indicators, CACI International is not utilizing all of its potentials. The recent stock price confusion, may contribute to short-horizon losses for the traders.

Autodesk

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Autodesk has generated negative risk-adjusted returns adding no value to investors with long positions. Despite uncertain performance in the last few months, the Stock's basic indicators remain quite persistent which may send shares a bit higher in May 2024. The latest mess may also be a sign of long-standing up-swing for the company institutional investors.

Pair Trading with CACI International and Autodesk

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

The idea behind CACI International and Autodesk 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.