Correlation Between Kuke Music and CGI

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

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

Diversification Opportunities for Kuke Music and CGI

0.39

Correlation Coefficient

Kuke Music  CGI

Weak diversification

The 3 months correlation between Kuke and CGI is 0.39. Overlapping area represents the amount of risk that can be diversified away by holding Kuke Music Holding and CGI Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CGI Inc and Kuke Music 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 Kuke Music Holding 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 Kuke Music i.e., Kuke Music and CGI go up and down completely randomly.

Pair Corralation between Kuke Music and CGI

Given the investment horizon of 90 days Kuke Music Holding is expected to under-perform the CGI. In addition to that, Kuke Music is 3.1 times more volatile than CGI Inc. It trades about -0.32 of its total potential returns per unit of risk. CGI Inc is currently generating about -0.07 per unit of volatility. If you would invest  10,427  in CGI Inc on May 1, 2025 and sell it today you would lose (436.00) from holding CGI Inc or give up 4.18% of portfolio value over 90 days.

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

Kuke Music Holding  vs.  CGI Inc

Kuke Music Holding

Risk-Adjusted Performance

Very Weak

Over the last 90 days Kuke Music Holding has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of weak performance in the last few months, the Stock's forward-looking signals remain rather sound which may send shares a bit higher in August 2025. The latest tumult may also be a sign of longer-term up-swing for the firm shareholders.

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 Kuke Music and CGI

The main advantage of trading using opposite Kuke Music and CGI positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Kuke Music 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 Kuke Music Holding 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 Premium Stories module to follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope.