Correlation Between CDW Corp and CGI

Specify exactly 2 symbols:
Can any of the company-specific risk be diversified away by investing in both CDW Corp and CGI 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 CDW Corp and CGI into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between CDW Corp and CGI Inc, you can compare the effects of market volatilities on CDW Corp and CGI 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 CDW Corp with a short position of CGI. Check out your portfolio center. Please also check ongoing floating volatility patterns of CDW Corp and CGI.

Diversification Opportunities for CDW Corp and CGI

0.83
  Correlation Coefficient

Very poor diversification

The 3 months correlation between CDW and CGI is 0.83. Overlapping area represents the amount of risk that can be diversified away by holding CDW Corp and CGI Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CGI Inc and CDW Corp 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 CDW Corp are associated (or correlated) with CGI. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CGI Inc has no effect on the direction of CDW Corp i.e., CDW Corp and CGI go up and down completely randomly.

Pair Corralation between CDW Corp and CGI

Considering the 90-day investment horizon CDW Corp is expected to generate 0.56 times more return on investment than CGI. However, CDW Corp is 1.78 times less risky than CGI. It trades about 0.35 of its potential returns per unit of risk. CGI Inc is currently generating about -0.15 per unit of risk. If you would invest  24,427  in CDW Corp on December 29, 2023 and sell it today you would earn a total of  1,360  from holding CDW Corp or generate 5.57% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthStrong
Accuracy95.65%
ValuesDaily Returns

CDW Corp  vs.  CGI Inc

 Performance 
       Timeline  
CDW Corp 

Risk-Adjusted Performance

14 of 100

 
Low
 
High
Good
Compared to the overall equity markets, risk-adjusted returns on investments in CDW Corp are ranked lower than 14 (%) of all global equities and portfolios over the last 90 days. In spite of fairly fragile fundamental indicators, CDW Corp showed solid returns over the last few months and may actually be approaching a breakup point.
CGI Inc 

Risk-Adjusted Performance

3 of 100

 
Low
 
High
Insignificant
Compared to the overall equity markets, risk-adjusted returns on investments in CGI Inc are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. Despite somewhat strong forward indicators, CGI is not utilizing all of its potentials. The latest stock price disturbance, may contribute to short-term losses for the investors.

CDW Corp and CGI Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with CDW Corp and CGI

The main advantage of trading using opposite CDW Corp and CGI positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CDW Corp position performs unexpectedly, CGI 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 CGI will offset losses from the drop in CGI's long position.
The idea behind CDW Corp and CGI Inc 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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.

Other Complementary Tools

Portfolio Dashboard
Portfolio dashboard that provides centralized access to all your investments
Correlation Analysis
Reduce portfolio risk simply by holding instruments which are not perfectly correlated
Efficient Frontier
Plot and analyze your portfolio and positions against risk-return landscape of the market.
ETF Categories
List of ETF categories grouped based on various criteria, such as the investment strategy or type of investments
USA ETFs
Find actively traded Exchange Traded Funds (ETF) in USA
Portfolio Backtesting
Avoid under-diversification and over-optimization by backtesting your portfolios
Financial Widgets
Easily integrated Macroaxis content with over 30 different plug-and-play financial widgets
Bonds Directory
Find actively traded corporate debentures issued by US companies
Idea Breakdown
Analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes
Companies Directory
Evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals
Competition Analyzer
Analyze and compare many basic indicators for a group of related or unrelated entities