Correlation Between Leidos Holdings and Science Applications
Can any of the company-specific risk be diversified away by investing in both Leidos Holdings and Science Applications 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 Science Applications into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Leidos Holdings and Science Applications International, you can compare the effects of market volatilities on Leidos Holdings and Science Applications 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 Science Applications. Check out your portfolio center. Please also check ongoing floating volatility patterns of Leidos Holdings and Science Applications.
Diversification Opportunities for Leidos Holdings and Science Applications
0.89 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Leidos and Science is 0.89. Overlapping area represents the amount of risk that can be diversified away by holding Leidos Holdings and Science Applications Internati in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Science Applications 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 Science Applications. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Science Applications has no effect on the direction of Leidos Holdings i.e., Leidos Holdings and Science Applications go up and down completely randomly.
Pair Corralation between Leidos Holdings and Science Applications
Given the investment horizon of 90 days Leidos Holdings is expected to generate 1.02 times more return on investment than Science Applications. However, Leidos Holdings is 1.02 times more volatile than Science Applications International. It trades about 0.23 of its potential returns per unit of risk. Science Applications International is currently generating about 0.11 per unit of risk. If you would invest 14,774 in Leidos Holdings on June 6, 2025 and sell it today you would earn a total of 2,997 from holding Leidos Holdings or generate 20.29% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Leidos Holdings vs. Science Applications Internati
Performance |
| Timeline |
| Leidos Holdings |
| Science Applications |
Leidos Holdings and Science Applications Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Leidos Holdings and Science Applications
The main advantage of trading using opposite Leidos Holdings and Science Applications positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Leidos Holdings position performs unexpectedly, Science Applications 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 Science Applications will offset losses from the drop in Science Applications' long position.| Leidos Holdings vs. Science Applications International | Leidos Holdings vs. CACI International | Leidos Holdings vs. CDW Corp | Leidos Holdings vs. Gartner |
| Science Applications vs. Leidos Holdings | Science Applications vs. CACI International | Science Applications vs. Parsons Corp | Science Applications vs. ASGN Inc |
Check out your portfolio center.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 Top Crypto Exchanges module to search and analyze digital assets across top global cryptocurrency exchanges.
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