Correlation Between CGI and Cantaloupe

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

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

Diversification Opportunities for CGI and Cantaloupe

-0.33

Correlation Coefficient

CGI  Cantaloupe

Very good diversification

The 3 months correlation between CGI and Cantaloupe is -0.33. Overlapping area represents the amount of risk that can be diversified away by holding CGI Inc and Cantaloupe in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cantaloupe 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 Cantaloupe. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Cantaloupe has no effect on the direction of CGI i.e., CGI and Cantaloupe go up and down completely randomly.

Pair Corralation between CGI and Cantaloupe

Considering the 90-day investment horizon CGI is expected to generate 2212.33 times less return on investment than Cantaloupe. But when comparing it to its historical volatility, CGI Inc is 2.42 times less risky than Cantaloupe. It trades about 0.0 of its potential returns per unit of risk. Cantaloupe is currently generating about 0.26 of returns per unit of risk over similar time horizon. If you would invest  624.00  in Cantaloupe on September 12, 2024 and sell it today you would earn a total of  310.00  from holding Cantaloupe or generate 49.68% return on investment over 90 days.

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

CGI Inc  vs.  Cantaloupe

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 newest stock price disturbance, may contribute to short-term losses for the investors.

Cantaloupe

Risk-Adjusted Performance

20 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Cantaloupe are ranked lower than 20 (%) of all global equities and portfolios over the last 90 days. Even with relatively unsteady essential indicators, Cantaloupe reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with CGI and Cantaloupe

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

The idea behind CGI Inc and Cantaloupe 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 Bonds Directory module to find actively traded corporate debentures issued by US companies.