Correlation Between Accenture Plc and CGI
Can any of the company-specific risk be diversified away by investing in both Accenture Plc 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 Accenture Plc and CGI into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Accenture plc and CGI Inc, you can compare the effects of market volatilities on Accenture Plc 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 Accenture Plc with a short position of CGI. Check out your portfolio center. Please also check ongoing floating volatility patterns of Accenture Plc and CGI.
Diversification Opportunities for Accenture Plc and CGI
0.84 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Accenture and CGI is 0.84. Overlapping area represents the amount of risk that can be diversified away by holding Accenture plc and CGI Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CGI Inc and Accenture Plc 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 Accenture plc 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 Accenture Plc i.e., Accenture Plc and CGI go up and down completely randomly.
Pair Corralation between Accenture Plc and CGI
Considering the 90-day investment horizon Accenture Plc is expected to generate 2.17 times less return on investment than CGI. In addition to that, Accenture Plc is 1.26 times more volatile than CGI Inc. It trades about 0.02 of its total potential returns per unit of risk. CGI Inc is currently generating about 0.05 per unit of volatility. If you would invest 7,981 in CGI Inc on January 20, 2024 and sell it today you would earn a total of 2,409 from holding CGI Inc or generate 30.18% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Accenture plc vs. CGI Inc
Performance |
| Timeline |
| Accenture plc |
| CGI Inc |
Accenture Plc and CGI Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Accenture Plc and CGI
The main advantage of trading using opposite Accenture Plc and CGI positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Accenture Plc 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.| Accenture Plc vs. Information Services Group | Accenture Plc vs. Home Bancorp | Accenture Plc vs. CRA International | Accenture Plc vs. Aquagold International |
| CGI vs. Information Services Group | CGI vs. Home Bancorp | CGI vs. CRA International | CGI vs. Aquagold 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 FinTech Suite module to use AI to screen and filter profitable investment opportunities.
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