Correlation Between Growth Fund and CGI
Can any of the company-specific risk be diversified away by investing in both Growth Fund 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 Growth Fund and CGI into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Growth Fund Of and CGI Inc, you can compare the effects of market volatilities on Growth Fund 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 Growth Fund with a short position of CGI. Check out your portfolio center. Please also check ongoing floating volatility patterns of Growth Fund and CGI.
Diversification Opportunities for Growth Fund and CGI
0.54 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Growth and CGI is 0.54. Overlapping area represents the amount of risk that can be diversified away by holding Growth Fund Of and CGI Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CGI Inc and Growth Fund 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 Growth Fund Of 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 Growth Fund i.e., Growth Fund and CGI go up and down completely randomly.
Pair Corralation between Growth Fund and CGI
Assuming the 90 days horizon Growth Fund is expected to generate 1.55 times less return on investment than CGI. But when comparing it to its historical volatility, Growth Fund Of is 1.07 times less risky than CGI. It trades about 0.24 of its potential returns per unit of risk. CGI Inc is currently generating about 0.35 of returns per unit of risk over similar time horizon. If you would invest 15,756 in CGI Inc on November 3, 2024 and sell it today you would earn a total of 1,377 from holding CGI Inc or generate 8.74% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 90.91% |
| Values | Daily Returns |
Growth Fund Of vs. CGI Inc
Performance |
| Timeline |
| Growth Fund |
| CGI Inc |
Growth Fund and CGI Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Growth Fund and CGI
The main advantage of trading using opposite Growth Fund and CGI positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Growth Fund 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.| Growth Fund vs. Capital World Growth | Growth Fund vs. Europacific Growth Fund | Growth Fund vs. New Perspective Fund | Growth Fund vs. Investment Of America |
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 Funds Screener module to find actively-traded funds from around the world traded on over 30 global exchanges.
Other Complementary Tools
| Portfolio Dashboard Portfolio dashboard that provides centralized access to all your investments | |
| Correlation Analysis Reduce portfolio risk simply by holding instruments which are not perfectly correlated | |
| Aroon Oscillator Analyze current equity momentum using Aroon Oscillator and other momentum ratios | |
| USA ETFs Find actively traded Exchange Traded Funds (ETF) in USA | |
| Financial Widgets Easily integrated Macroaxis content with over 30 different plug-and-play financial widgets |