Correlation Between Fiera Capital and GDI Integrated

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

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

Diversification Opportunities for Fiera Capital and GDI Integrated

0.85

Correlation Coefficient

Fiera Capital  GDI Integrated

Very poor diversification

The 3 months correlation between Fiera and GDI is 0.85. Overlapping area represents the amount of risk that can be diversified away by holding Fiera Capital and GDI Integrated in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on GDI Integrated and Fiera Capital 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 Fiera Capital are associated (or correlated) with GDI Integrated. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of GDI Integrated has no effect on the direction of Fiera Capital i.e., Fiera Capital and GDI Integrated go up and down completely randomly.

Pair Corralation between Fiera Capital and GDI Integrated

Assuming the 90 days trading horizon Fiera Capital is expected to under-perform the GDI Integrated. But the stock apears to be less risky and, when comparing its historical volatility, Fiera Capital is 1.15 times less risky than GDI Integrated. The stock trades about -0.22 of its potential returns per unit of risk. The GDI Integrated is currently generating about -0.05 of returns per unit of risk over similar time horizon. If you would invest  3,834  in GDI Integrated on December 28, 2024 and sell it today you would lose (357.00) from holding GDI Integrated or give up 9.31% of portfolio value over 90 days.

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

Fiera Capital  vs.  GDI Integrated

Fiera Capital

Risk-Adjusted Performance

Very Weak

Over the last 90 days Fiera Capital has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of unfluctuating performance in the last few months, the Stock's basic indicators remain very healthy which may send shares a bit higher in April 2025. The recent disarray may also be a sign of long period up-swing for the firm investors.

GDI Integrated

Risk-Adjusted Performance

Very Weak

Over the last 90 days GDI Integrated has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest weak performance, the Stock's forward indicators remain healthy and the recent disarray on Wall Street may also be a sign of long period gains for the firm investors.

Pair Trading with Fiera Capital and GDI Integrated

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

The idea behind Fiera Capital and GDI Integrated 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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.