Correlation Between Telus Corp and CGI
Can any of the company-specific risk be diversified away by investing in both Telus Corp 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 Telus Corp and CGI into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Telus Corp and CGI Inc, you can compare the effects of market volatilities on Telus Corp 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 Telus Corp with a short position of CGI. Check out your portfolio center. Please also check ongoing floating volatility patterns of Telus Corp and CGI.
Diversification Opportunities for Telus Corp and CGI
0.46 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Telus and CGI is 0.46. Overlapping area represents the amount of risk that can be diversified away by holding Telus Corp and CGI Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CGI Inc and Telus Corp 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 Telus Corp 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 Telus Corp i.e., Telus Corp and CGI go up and down completely randomly.
Pair Corralation between Telus Corp and CGI
Given the investment horizon of 90 days Telus Corp is expected to under-perform the CGI. But the stock apears to be less risky and, when comparing its historical volatility, Telus Corp is 1.12 times less risky than CGI. The stock trades about -0.1 of its potential returns per unit of risk. The CGI Inc is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest 15,350 in CGI Inc on August 26, 2024 and sell it today you would earn a total of 259.00 from holding CGI Inc or generate 1.69% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Telus Corp vs. CGI Inc
Performance |
| Timeline |
| Telus Corp |
| CGI Inc |
Telus Corp and CGI Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Telus Corp and CGI
The main advantage of trading using opposite Telus Corp and CGI positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Telus Corp 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.| Telus Corp vs. BCE Inc | Telus Corp vs. Fortis Inc | Telus Corp vs. Enbridge | Telus Corp vs. Toronto Dominion Bank |
| CGI vs. Telus Corp | CGI vs. Toronto Dominion Bank | CGI vs. Manulife Financial Corp | CGI vs. Canadian Natural Resources |
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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