Correlation Between CGI and BIT Mining
Can any of the company-specific risk be diversified away by investing in both CGI and BIT Mining 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 BIT Mining into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between CGI Inc and BIT Mining, you can compare the effects of market volatilities on CGI and BIT Mining 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 BIT Mining. Check out your portfolio center. Please also check ongoing floating volatility patterns of CGI and BIT Mining.
Diversification Opportunities for CGI and BIT Mining
-0.43 | Correlation Coefficient |
Very good diversification
The 3 months correlation between CGI and BIT is -0.43. Overlapping area represents the amount of risk that can be diversified away by holding CGI Inc and BIT Mining in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BIT Mining 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 BIT Mining. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of BIT Mining has no effect on the direction of CGI i.e., CGI and BIT Mining go up and down completely randomly.
Pair Corralation between CGI and BIT Mining
Considering the 90-day investment horizon CGI is expected to generate 4.08 times less return on investment than BIT Mining. But when comparing it to its historical volatility, CGI Inc is 5.75 times less risky than BIT Mining. It trades about 0.05 of its potential returns per unit of risk. BIT Mining is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest 230.00 in BIT Mining on August 27, 2024 and sell it today you would earn a total of 47.00 from holding BIT Mining or generate 20.43% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
CGI Inc vs. BIT Mining
Performance |
| Timeline |
| CGI Inc |
| BIT Mining |
CGI and BIT Mining Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with CGI and BIT Mining
The main advantage of trading using opposite CGI and BIT Mining positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CGI position performs unexpectedly, BIT Mining 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 BIT Mining will offset losses from the drop in BIT Mining's long position.The idea behind CGI Inc and BIT Mining 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.| BIT Mining vs. VNET Group DRC | BIT Mining vs. GDS Holdings | BIT Mining vs. CLARIVATE PLC | BIT Mining vs. CACI International |
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 Price Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.
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