Correlation Between CGI and Widepoint

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

By analyzing existing cross correlation between CGI Inc and Widepoint C, you can compare the effects of market volatilities on CGI and Widepoint 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 Widepoint. Check out your portfolio center. Please also check ongoing floating volatility patterns of CGI and Widepoint.

Diversification Opportunities for CGI and Widepoint

0.26

Correlation Coefficient

CGI  Widepoint

Modest diversification

The 3 months correlation between CGI and Widepoint is 0.26. Overlapping area represents the amount of risk that can be diversified away by holding CGI Inc and Widepoint C in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Widepoint C 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 Widepoint. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Widepoint C has no effect on the direction of CGI i.e., CGI and Widepoint go up and down completely randomly.

Pair Corralation between CGI and Widepoint

Considering the 90-day investment horizon CGI Inc is expected to generate 0.16 times more return on investment than Widepoint. However, CGI Inc is 6.31 times less risky than Widepoint. It trades about -0.12 of its potential returns per unit of risk. Widepoint C is currently generating about -0.09 per unit of risk. If you would invest  10,482  in CGI Inc on May 2, 2025 and sell it today you would lose (775.00) from holding CGI Inc or give up 7.39% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	100.0%
Values	Daily Returns

CGI Inc  vs.  Widepoint C

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 latest fragile performance, the Stock's forward indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the company investors.

Widepoint C

Risk-Adjusted Performance

Very Weak

Over the last 90 days Widepoint C has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of unfluctuating performance in the last few months, the Stock's basic indicators remain fairly strong which may send shares a bit higher in August 2025. The current disturbance may also be a sign of long term up-swing for the company investors.

Pair Trading with CGI and Widepoint

The main advantage of trading using opposite CGI and Widepoint positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CGI position performs unexpectedly, Widepoint 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 Widepoint will offset losses from the drop in Widepoint's long position.

The idea behind CGI Inc and Widepoint C 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 Fundamentals Comparison module to compare fundamentals across multiple equities to find investing opportunities.