Correlation Between Texas Instruments and CGI

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

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

Diversification Opportunities for Texas Instruments and CGI

-0.38

Correlation Coefficient

Texas Instruments  CGI

Very good diversification

The 3 months correlation between Texas and CGI is -0.38. Overlapping area represents the amount of risk that can be diversified away by holding Texas Instruments Incorporated and CGI Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CGI Inc and Texas Instruments 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 Texas Instruments Incorporated 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 Texas Instruments i.e., Texas Instruments and CGI go up and down completely randomly.

Pair Corralation between Texas Instruments and CGI

Considering the 90-day investment horizon Texas Instruments Incorporated is expected to generate 2.67 times more return on investment than CGI. However, Texas Instruments is 2.67 times more volatile than CGI Inc. It trades about 0.1 of its potential returns per unit of risk. CGI Inc is currently generating about -0.15 per unit of risk. If you would invest  15,993  in Texas Instruments Incorporated on May 6, 2025 and sell it today you would earn a total of  2,280  from holding Texas Instruments Incorporated or generate 14.26% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	98.41%
Values	Daily Returns

Texas Instruments Incorporated  vs.  CGI Inc

Texas Instruments

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Texas Instruments Incorporated are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. In spite of very weak basic indicators, Texas Instruments displayed 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. In spite of latest unfluctuating performance, the Stock's basic indicators remain stable and the newest uproar on Wall Street may also be a sign of mid-term gains for the firm private investors.

Pair Trading with Texas Instruments and CGI

The main advantage of trading using opposite Texas Instruments and CGI positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Texas Instruments 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 Texas Instruments Incorporated 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.

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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.