Correlation Between CGI and Kinaxis

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

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

Diversification Opportunities for CGI and Kinaxis

-0.02

Correlation Coefficient

CGI  Kinaxis

Good diversification

The 3 months correlation between CGI and Kinaxis is -0.02. Overlapping area represents the amount of risk that can be diversified away by holding CGI Inc and Kinaxis in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kinaxis 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 Kinaxis. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Kinaxis has no effect on the direction of CGI i.e., CGI and Kinaxis go up and down completely randomly.

Pair Corralation between CGI and Kinaxis

Assuming the 90 days trading horizon CGI Inc is expected to under-perform the Kinaxis. But the stock apears to be less risky and, when comparing its historical volatility, CGI Inc is 1.3 times less risky than Kinaxis. The stock trades about -0.11 of its potential returns per unit of risk. The Kinaxis is currently generating about 0.2 of returns per unit of risk over similar time horizon. If you would invest  17,450  in Kinaxis on April 22, 2025 and sell it today you would earn a total of  2,674  from holding Kinaxis or generate 15.32% 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.  Kinaxis

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. In spite of latest weak performance, the Stock's basic indicators remain stable and the newest uproar on Wall Street may also be a sign of mid-term gains for the firm private investors.

Kinaxis

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Kinaxis are ranked lower than 15 (%) of all global equities and portfolios over the last 90 days. In spite of very unfluctuating basic indicators, Kinaxis displayed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with CGI and Kinaxis

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

The idea behind CGI Inc and Kinaxis 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 Correlation Analysis module to reduce portfolio risk simply by holding instruments which are not perfectly correlated.