Correlation Between Digimarc and CGI
Can any of the company-specific risk be diversified away by investing in both Digimarc 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 Digimarc and CGI into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Digimarc and CGI Inc, you can compare the effects of market volatilities on Digimarc 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 Digimarc with a short position of CGI. Check out your portfolio center. Please also check ongoing floating volatility patterns of Digimarc and CGI.
Diversification Opportunities for Digimarc and CGI
Weak diversification
The 3 months correlation between Digimarc and CGI is 0.36. Overlapping area represents the amount of risk that can be diversified away by holding Digimarc and CGI Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CGI Inc and Digimarc 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 Digimarc 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 Digimarc i.e., Digimarc and CGI go up and down completely randomly.
Pair Corralation between Digimarc and CGI
Given the investment horizon of 90 days Digimarc is expected to under-perform the CGI. In addition to that, Digimarc is 1.81 times more volatile than CGI Inc. It trades about -0.38 of its total potential returns per unit of risk. CGI Inc is currently generating about -0.47 per unit of volatility. If you would invest 11,723 in CGI Inc on January 19, 2024 and sell it today you would lose (1,333) from holding CGI Inc or give up 11.37% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Digimarc vs. CGI Inc
Performance |
| Timeline |
| Digimarc |
| CGI Inc |
Digimarc and CGI Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Digimarc and CGI
The main advantage of trading using opposite Digimarc and CGI positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Digimarc 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.| Digimarc vs. Pfizer Inc | Digimarc vs. Home Federal Bancorp | Digimarc vs. Betterware De Mexico | Digimarc vs. Heartland Financial USA |
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 Portfolio Anywhere module to track or share privately all of your investments from the convenience of any device.
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