Correlation Between CGI and Usio
Can any of the company-specific risk be diversified away by investing in both CGI and Usio 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 Usio into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between CGI Inc and Usio Inc, you can compare the effects of market volatilities on CGI and Usio 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 Usio. Check out your portfolio center. Please also check ongoing floating volatility patterns of CGI and Usio.
Diversification Opportunities for CGI and Usio
Excellent diversification
The 3 months correlation between CGI and Usio is -0.54. Overlapping area represents the amount of risk that can be diversified away by holding CGI Inc and Usio Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Usio Inc 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 Usio. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Usio Inc has no effect on the direction of CGI i.e., CGI and Usio go up and down completely randomly.
Pair Corralation between CGI and Usio
Considering the 90-day investment horizon CGI Inc is expected to under-perform the Usio. But the stock apears to be less risky and, when comparing its historical volatility, CGI Inc is 1.69 times less risky than Usio. The stock trades about -0.05 of its potential returns per unit of risk. The Usio Inc is currently generating about 0.14 of returns per unit of risk over similar time horizon. If you would invest 140.00 in Usio Inc on August 24, 2024 and sell it today you would earn a total of 9.00 from holding Usio Inc or generate 6.43% 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. Usio Inc
Performance |
| Timeline |
| CGI Inc |
| Usio Inc |
CGI and Usio Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with CGI and Usio
The main advantage of trading using opposite CGI and Usio positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CGI position performs unexpectedly, Usio 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 Usio will offset losses from the drop in Usio's long position.The idea behind CGI Inc and Usio 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.| Usio vs. Appen Limited | Usio vs. Value Exchange International | Usio vs. Appen Limited | Usio vs. Deveron Corp |
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 Economic Indicators module to top statistical indicators that provide insights into how an economy is performing.
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