Correlation Between CGI and Accenture Plc
Can any of the company-specific risk be diversified away by investing in both CGI and Accenture Plc 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 Accenture Plc into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between CGI Inc and Accenture plc, you can compare the effects of market volatilities on CGI and Accenture Plc 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 Accenture Plc. Check out your portfolio center. Please also check ongoing floating volatility patterns of CGI and Accenture Plc.
Diversification Opportunities for CGI and Accenture Plc
0.88 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between CGI and Accenture is 0.88. Overlapping area represents the amount of risk that can be diversified away by holding CGI Inc and Accenture plc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Accenture plc 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 Accenture Plc. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Accenture plc has no effect on the direction of CGI i.e., CGI and Accenture Plc go up and down completely randomly.
Pair Corralation between CGI and Accenture Plc
Considering the 90-day investment horizon CGI Inc is expected to generate 0.74 times more return on investment than Accenture Plc. However, CGI Inc is 1.35 times less risky than Accenture Plc. It trades about -0.22 of its potential returns per unit of risk. Accenture plc is currently generating about -0.26 per unit of risk. If you would invest 10,940 in CGI Inc on January 26, 2024 and sell it today you would lose (450.00) from holding CGI Inc or give up 4.11% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
CGI Inc vs. Accenture plc
Performance |
| Timeline |
| CGI Inc |
| Accenture plc |
CGI and Accenture Plc Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with CGI and Accenture Plc
The main advantage of trading using opposite CGI and Accenture Plc positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CGI position performs unexpectedly, Accenture Plc 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 Accenture Plc will offset losses from the drop in Accenture Plc's long position.| CGI vs. CACI International | CGI vs. CDW Corp | CGI vs. Jack Henry Associates | CGI vs. Broadridge Financial Solutions |
| Accenture Plc vs. CACI International | Accenture Plc vs. CDW Corp | Accenture Plc vs. Jack Henry Associates | Accenture Plc vs. Broadridge Financial Solutions |
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 Premium Stories module to follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope.
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