Correlation Between Tesla and CGI
Can any of the company-specific risk be diversified away by investing in both Tesla 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 Tesla and CGI into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Tesla Inc and CGI Inc, you can compare the effects of market volatilities on Tesla 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 Tesla with a short position of CGI. Check out your portfolio center. Please also check ongoing floating volatility patterns of Tesla and CGI.
Diversification Opportunities for Tesla and CGI
Very weak diversification
The 3 months correlation between Tesla and CGI is 0.42. Overlapping area represents the amount of risk that can be diversified away by holding Tesla Inc and CGI Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CGI Inc and Tesla 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 Tesla Inc 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 Tesla i.e., Tesla and CGI go up and down completely randomly.
Pair Corralation between Tesla and CGI
Given the investment horizon of 90 days Tesla Inc is expected to under-perform the CGI. In addition to that, Tesla is 2.71 times more volatile than CGI Inc. It trades about -0.01 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 7,950 in CGI Inc on January 26, 2024 and sell it today you would earn a total of 2,579 from holding CGI Inc or generate 32.44% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 99.8% |
| Values | Daily Returns |
Tesla Inc vs. CGI Inc
Performance |
| Timeline |
| Tesla Inc |
| CGI Inc |
Tesla and CGI Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Tesla and CGI
The main advantage of trading using opposite Tesla and CGI positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Tesla 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.| Tesla vs. Hycroft Mining Holding | Tesla vs. Imperial Petroleum | Tesla vs. Exela Technologies | Tesla vs. Camber Energy |
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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.
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