Correlation Between Cenovus Energy and CGI
Can any of the company-specific risk be diversified away by investing in both Cenovus Energy 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 Cenovus Energy and CGI into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Cenovus Energy and CGI Inc, you can compare the effects of market volatilities on Cenovus Energy 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 Cenovus Energy with a short position of CGI. Check out your portfolio center. Please also check ongoing floating volatility patterns of Cenovus Energy and CGI.
Diversification Opportunities for Cenovus Energy and CGI
-0.45 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Cenovus and CGI is -0.45. Overlapping area represents the amount of risk that can be diversified away by holding Cenovus Energy and CGI Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CGI Inc and Cenovus Energy 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 Cenovus Energy 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 Cenovus Energy i.e., Cenovus Energy and CGI go up and down completely randomly.
Pair Corralation between Cenovus Energy and CGI
Assuming the 90 days trading horizon Cenovus Energy is expected to generate 1.01 times more return on investment than CGI. However, Cenovus Energy is 1.01 times more volatile than CGI Inc. It trades about 0.41 of its potential returns per unit of risk. CGI Inc is currently generating about -0.38 per unit of risk. If you would invest 2,566 in Cenovus Energy on January 18, 2024 and sell it today you would earn a total of 290.00 from holding Cenovus Energy or generate 11.3% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Cenovus Energy vs. CGI Inc
Performance |
| Timeline |
| Cenovus Energy |
| CGI Inc |
Cenovus Energy and CGI Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Cenovus Energy and CGI
The main advantage of trading using opposite Cenovus Energy and CGI positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Cenovus Energy 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.| Cenovus Energy vs. Canadian Natural Resources | Cenovus Energy vs. Crescent Point Energy | Cenovus Energy vs. Suncor Energy | Cenovus Energy vs. MEG Energy Corp |
| CGI vs. ASGN Inc | CGI vs. CACI International | CGI vs. Perficient | CGI vs. Science Applications 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 Alpha Finder module to use alpha and beta coefficients to find investment opportunities after accounting for the risk.
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