Correlation Between CGI and Fiserv

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

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

Diversification Opportunities for CGI and Fiserv

0.0

Correlation Coefficient

CGI  Fiserv

Pay attention - limited upside

The 3 months correlation between CGI and Fiserv is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding CGI Inc and Fiserv Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fiserv Inc 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 Fiserv. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Fiserv Inc has no effect on the direction of CGI i.e., CGI and Fiserv go up and down completely randomly.

Pair Corralation between CGI and Fiserv

If you would invest (100.00) in Fiserv Inc on December 18, 2024 and sell it today you would earn a total of  100.00  from holding Fiserv Inc or generate -100.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	0.0%
Values	Daily Returns

CGI Inc  vs.  Fiserv Inc

CGI Inc

Risk-Adjusted Performance

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.

Fiserv Inc

Risk-Adjusted Performance

Very Weak

Over the last 90 days Fiserv Inc has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly stable basic indicators, Fiserv is not utilizing all of its potentials. The current stock price fuss, may contribute to near-short-term losses for the sophisticated investors.

Pair Trading with CGI and Fiserv

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

The idea behind CGI Inc and Fiserv 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.

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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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.