Correlation Between Science Applications and Huntington Ingalls

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

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

Diversification Opportunities for Science Applications and Huntington Ingalls

0.3

Correlation Coefficient

Science Applications  Huntington Ingalls

Weak diversification

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

Pair Corralation between Science Applications and Huntington Ingalls

Given the investment horizon of 90 days Science Applications International is expected to under-perform the Huntington Ingalls. In addition to that, Science Applications is 1.35 times more volatile than Huntington Ingalls Industries. It trades about -0.02 of its total potential returns per unit of risk. Huntington Ingalls Industries is currently generating about 0.19 per unit of volatility. If you would invest  22,203  in Huntington Ingalls Industries on May 21, 2025 and sell it today you would earn a total of  4,557  from holding Huntington Ingalls Industries or generate 20.52% return on investment over 90 days.

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

Science Applications Internati  vs.  Huntington Ingalls Industries

Science Applications

Risk-Adjusted Performance

Weakest

Over the last 90 days Science Applications International has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of rather sound forward indicators, Science Applications is not utilizing all of its potentials. The newest stock price tumult, may contribute to shorter-term losses for the shareholders.

Huntington Ingalls

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Huntington Ingalls Industries are ranked lower than 14 (%) of all global equities and portfolios over the last 90 days. Despite fairly uncertain forward indicators, Huntington Ingalls demonstrated solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Science Applications and Huntington Ingalls

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

The idea behind Science Applications International and Huntington Ingalls Industries 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.

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 Pattern Recognition module to use different Pattern Recognition models to time the market across multiple global exchanges.