Correlation Between Salesforce and CGI
Can any of the company-specific risk be diversified away by investing in both Salesforce 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 Salesforce and CGI into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Salesforce and CGI Inc, you can compare the effects of market volatilities on Salesforce 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 Salesforce with a short position of CGI. Check out your portfolio center. Please also check ongoing floating volatility patterns of Salesforce and CGI.
Diversification Opportunities for Salesforce and CGI
0.18 | Correlation Coefficient |
Average diversification
The 3 months correlation between Salesforce and CGI is 0.18. Overlapping area represents the amount of risk that can be diversified away by holding Salesforce and CGI Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CGI Inc and Salesforce 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 Salesforce 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 Salesforce i.e., Salesforce and CGI go up and down completely randomly.
Pair Corralation between Salesforce and CGI
Considering the 90-day investment horizon Salesforce is expected to generate 1.75 times more return on investment than CGI. However, Salesforce is 1.75 times more volatile than CGI Inc. It trades about 0.12 of its potential returns per unit of risk. CGI Inc is currently generating about 0.05 per unit of risk. If you would invest 24,910 in Salesforce on October 22, 2024 and sell it today you would earn a total of 7,546 from holding Salesforce or generate 30.29% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 98.4% |
| Values | Daily Returns |
Salesforce vs. CGI Inc
Performance |
| Timeline |
| Salesforce |
| CGI Inc |
Salesforce and CGI Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Salesforce and CGI
The main advantage of trading using opposite Salesforce and CGI positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Salesforce 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.| Salesforce vs. Zoom Video Communications | Salesforce vs. C3 Ai Inc | Salesforce vs. Shopify | Salesforce vs. Workday |
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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.
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