Correlation Between Usio and CGI

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

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

Diversification Opportunities for Usio and CGI

-0.47

Correlation Coefficient

Usio  CGI

Very good diversification

The 3 months correlation between Usio and CGI is -0.47. Overlapping area represents the amount of risk that can be diversified away by holding Usio Inc and CGI Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CGI Inc and Usio 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 Usio 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 Usio i.e., Usio and CGI go up and down completely randomly.

Pair Corralation between Usio and CGI

Given the investment horizon of 90 days Usio Inc is expected to generate 2.08 times more return on investment than CGI. However, Usio is 2.08 times more volatile than CGI Inc. It trades about 0.01 of its potential returns per unit of risk. CGI Inc is currently generating about 0.01 per unit of risk. If you would invest  151.00  in Usio Inc on September 1, 2024 and sell it today you would earn a total of  0.00  from holding Usio Inc or generate 0.0% return on investment over 90 days.

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

Usio Inc  vs.  CGI Inc

Usio Inc

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Usio Inc has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of very healthy forward indicators, Usio is not utilizing all of its potentials. The current stock price disarray, may contribute to short-term losses for the investors.

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.

Pair Trading with Usio and CGI

The main advantage of trading using opposite Usio and CGI positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Usio 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.

The idea behind Usio Inc and CGI Inc 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.

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 Portfolio Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.