Correlation Between SPS Commerce and CACI International

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

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

Diversification Opportunities for SPS Commerce and CACI International

-0.24

Correlation Coefficient

SPS Commerce  CACI International

Very good diversification

The 3 months correlation between SPS and CACI is -0.24. Overlapping area represents the amount of risk that can be diversified away by holding SPS Commerce and CACI International in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CACI International and SPS Commerce 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 SPS Commerce 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 SPS Commerce i.e., SPS Commerce and CACI International go up and down completely randomly.

Pair Corralation between SPS Commerce and CACI International

Given the investment horizon of 90 days SPS Commerce is expected to under-perform the CACI International. In addition to that, SPS Commerce is 1.83 times more volatile than CACI International. It trades about -0.1 of its total potential returns per unit of risk. CACI International is currently generating about 0.03 per unit of volatility. If you would invest  47,792  in CACI International on May 17, 2025 and sell it today you would earn a total of  1,276  from holding CACI International or generate 2.67% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

SPS Commerce  vs.  CACI International

SPS Commerce

Risk-Adjusted Performance

Weakest

Over the last 90 days SPS Commerce has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of uncertain performance in the last few months, the Stock's basic indicators remain rather sound which may send shares a bit higher in September 2025. The latest tumult may also be a sign of longer-term up-swing for the firm shareholders.

CACI International

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in CACI International are ranked lower than 2 (%) 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 latest stock price confusion, may contribute to short-horizon losses for the traders.

Pair Trading with SPS Commerce and CACI International

The main advantage of trading using opposite SPS Commerce and CACI International positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SPS Commerce 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 SPS Commerce 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 Technical Analysis module to check basic technical indicators and analysis based on most latest market data.