Correlation Between CGI and Cytodyn

Can any of the company-specific risk be diversified away by investing in both CGI and Cytodyn 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 Cytodyn into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between CGI Inc and Cytodyn, you can compare the effects of market volatilities on CGI and Cytodyn 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 Cytodyn. Check out your portfolio center. Please also check ongoing floating volatility patterns of CGI and Cytodyn.

Diversification Opportunities for CGI and Cytodyn

0.14

Correlation Coefficient

CGI  Cytodyn

Average diversification

The 3 months correlation between CGI and Cytodyn is 0.14. Overlapping area represents the amount of risk that can be diversified away by holding CGI Inc and Cytodyn in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cytodyn 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 Cytodyn. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Cytodyn has no effect on the direction of CGI i.e., CGI and Cytodyn go up and down completely randomly.

Pair Corralation between CGI and Cytodyn

Considering the 90-day investment horizon CGI is expected to generate 1.33 times less return on investment than Cytodyn. But when comparing it to its historical volatility, CGI Inc is 5.76 times less risky than Cytodyn. It trades about 0.04 of its potential returns per unit of risk. Cytodyn is currently generating about 0.01 of returns per unit of risk over similar time horizon. If you would invest  39.00  in Cytodyn on January 17, 2024 and sell it today you would lose (25.00) from holding Cytodyn or give up 64.1% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

CGI Inc  vs.  Cytodyn

CGI Inc

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days CGI Inc has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong forward indicators, CGI is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Cytodyn

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Cytodyn has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly strong fundamental indicators, Cytodyn is not utilizing all of its potentials. The newest stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with CGI and Cytodyn

The main advantage of trading using opposite CGI and Cytodyn positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CGI position performs unexpectedly, Cytodyn 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 Cytodyn will offset losses from the drop in Cytodyn's long position.

The idea behind CGI Inc and Cytodyn pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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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.