Correlation Between GDI Property and Home Consortium

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

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

Diversification Opportunities for GDI Property and Home Consortium

-0.57

Correlation Coefficient

GDI Property  Home Consortium

Excellent diversification

The 3 months correlation between GDI and Home is -0.57. Overlapping area represents the amount of risk that can be diversified away by holding GDI Property Group and Home Consortium in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Home Consortium and GDI Property 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 GDI Property Group are associated (or correlated) with Home Consortium. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Home Consortium has no effect on the direction of GDI Property i.e., GDI Property and Home Consortium go up and down completely randomly.

Pair Corralation between GDI Property and Home Consortium

Assuming the 90 days trading horizon GDI Property Group is expected to generate 0.63 times more return on investment than Home Consortium. However, GDI Property Group is 1.59 times less risky than Home Consortium. It trades about 0.12 of its potential returns per unit of risk. Home Consortium is currently generating about -0.23 per unit of risk. If you would invest  57.00  in GDI Property Group on December 28, 2024 and sell it today you would earn a total of  7.00  from holding GDI Property Group or generate 12.28% return on investment over 90 days.

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

GDI Property Group  vs.  Home Consortium

GDI Property Group

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in GDI Property Group are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain forward indicators, GDI Property unveiled solid returns over the last few months and may actually be approaching a breakup point.

Home Consortium

Risk-Adjusted Performance

Very Weak

Over the last 90 days Home Consortium has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of uncertain performance in the last few months, the Stock's fundamental indicators remain comparatively stable which may send shares a bit higher in April 2025. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.

Pair Trading with GDI Property and Home Consortium

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

The idea behind GDI Property Group and Home Consortium 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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.