Correlation Between CID HoldCo, and CGI

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

By analyzing existing cross correlation between CID HoldCo, Warrants and CGI Inc, you can compare the effects of market volatilities on CID HoldCo, 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 CID HoldCo, with a short position of CGI. Check out your portfolio center. Please also check ongoing floating volatility patterns of CID HoldCo, and CGI.

Diversification Opportunities for CID HoldCo, and CGI

-0.81

Correlation Coefficient

CID HoldCo,  CGI

Pay attention - limited upside

The 3 months correlation between CID and CGI is -0.81. Overlapping area represents the amount of risk that can be diversified away by holding CID HoldCo, Warrants and CGI Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CGI Inc and CID HoldCo, 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 CID HoldCo, Warrants 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 CID HoldCo, i.e., CID HoldCo, and CGI go up and down completely randomly.

Pair Corralation between CID HoldCo, and CGI

Assuming the 90 days horizon CID HoldCo, Warrants is expected to generate 27.29 times more return on investment than CGI. However, CID HoldCo, is 27.29 times more volatile than CGI Inc. It trades about 0.26 of its potential returns per unit of risk. CGI Inc is currently generating about -0.05 per unit of risk. If you would invest  3.00  in CID HoldCo, Warrants on April 25, 2025 and sell it today you would earn a total of  11.00  from holding CID HoldCo, Warrants or generate 366.67% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Significant
Accuracy	64.52%
Values	Daily Returns

CID HoldCo, Warrants  vs.  CGI Inc

CID HoldCo, Warrants

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in CID HoldCo, Warrants are ranked lower than 20 (%) of all global equities and portfolios over the last 90 days. In spite of fairly unsteady fundamental indicators, CID HoldCo, showed solid returns over the last few months and may actually be approaching a breakup point.

CGI Inc

Risk-Adjusted Performance

Very Weak

Over the last 90 days CGI Inc has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong forward indicators, CGI is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with CID HoldCo, and CGI

The main advantage of trading using opposite CID HoldCo, and CGI positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CID HoldCo, 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 CID HoldCo, Warrants 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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.