Correlation Between CGI and Gartner
Can any of the company-specific risk be diversified away by investing in both CGI and Gartner 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 CGI and Gartner into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between CGI Inc and Gartner, you can compare the effects of market volatilities on CGI and Gartner 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 CGI with a short position of Gartner. Check out your portfolio center. Please also check ongoing floating volatility patterns of CGI and Gartner.
Diversification Opportunities for CGI and Gartner
Modest diversification
The 3 months correlation between CGI and Gartner is 0.24. Overlapping area represents the amount of risk that can be diversified away by holding CGI Inc and Gartner in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Gartner and CGI 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 CGI Inc are associated (or correlated) with Gartner. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Gartner has no effect on the direction of CGI i.e., CGI and Gartner go up and down completely randomly.
Pair Corralation between CGI and Gartner
Considering the 90-day investment horizon CGI is expected to generate 9.8 times less return on investment than Gartner. But when comparing it to its historical volatility, CGI Inc is 1.31 times less risky than Gartner. It trades about 0.01 of its potential returns per unit of risk. Gartner is currently generating about 0.11 of returns per unit of risk over similar time horizon. If you would invest 30,760 in Gartner on January 26, 2024 and sell it today you would earn a total of 14,346 from holding Gartner or generate 46.64% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
CGI Inc vs. Gartner
Performance |
| Timeline |
| CGI Inc |
| Gartner |
CGI and Gartner Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with CGI and Gartner
The main advantage of trading using opposite CGI and Gartner positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CGI position performs unexpectedly, Gartner 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 Gartner will offset losses from the drop in Gartner's long position.| CGI vs. CACI International | CGI vs. CDW Corp | CGI vs. Jack Henry Associates | CGI vs. Broadridge Financial Solutions |
| Gartner vs. CACI International | Gartner vs. CDW Corp | Gartner vs. Jack Henry Associates | Gartner vs. Broadridge Financial Solutions |
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 Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.
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