Correlation Between CGI and SAIHEAT
Can any of the company-specific risk be diversified away by investing in both CGI and SAIHEAT 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 SAIHEAT into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between CGI Inc and SAIHEAT Limited, you can compare the effects of market volatilities on CGI and SAIHEAT 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 SAIHEAT. Check out your portfolio center. Please also check ongoing floating volatility patterns of CGI and SAIHEAT.
Diversification Opportunities for CGI and SAIHEAT
Very good diversification
The 3 months correlation between CGI and SAIHEAT is -0.47. Overlapping area represents the amount of risk that can be diversified away by holding CGI Inc and SAIHEAT Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SAIHEAT Limited 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 SAIHEAT. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SAIHEAT Limited has no effect on the direction of CGI i.e., CGI and SAIHEAT go up and down completely randomly.
Pair Corralation between CGI and SAIHEAT
Considering the 90-day investment horizon CGI Inc is expected to under-perform the SAIHEAT. But the stock apears to be less risky and, when comparing its historical volatility, CGI Inc is 12.63 times less risky than SAIHEAT. The stock trades about -0.05 of its potential returns per unit of risk. The SAIHEAT Limited is currently generating about 0.09 of returns per unit of risk over similar time horizon. If you would invest 76.00 in SAIHEAT Limited on August 29, 2024 and sell it today you would earn a total of 19.00 from holding SAIHEAT Limited or generate 25.0% 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. SAIHEAT Limited
Performance |
| Timeline |
| CGI Inc |
| SAIHEAT Limited |
CGI and SAIHEAT Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with CGI and SAIHEAT
The main advantage of trading using opposite CGI and SAIHEAT positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CGI position performs unexpectedly, SAIHEAT 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 SAIHEAT will offset losses from the drop in SAIHEAT's long position.The idea behind CGI Inc and SAIHEAT Limited 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.| SAIHEAT vs. Raymond James Financial | SAIHEAT vs. The Charles Schwab | SAIHEAT vs. The Charles Schwab | SAIHEAT vs. Houlihan Lokey |
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 Money Flow Index module to determine momentum by analyzing Money Flow Index and other technical indicators.
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