Correlation Between GDI Integrated and Aimia

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

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

Diversification Opportunities for GDI Integrated and Aimia

0.09

Correlation Coefficient

GDI Integrated  Aimia

Significant diversification

The 3 months correlation between GDI and Aimia is 0.09. Overlapping area represents the amount of risk that can be diversified away by holding GDI Integrated and Aimia Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Aimia Inc and GDI Integrated 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 Integrated are associated (or correlated) with Aimia. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Aimia Inc has no effect on the direction of GDI Integrated i.e., GDI Integrated and Aimia go up and down completely randomly.

Pair Corralation between GDI Integrated and Aimia

Assuming the 90 days trading horizon GDI Integrated is expected to generate 2.2 times less return on investment than Aimia. But when comparing it to its historical volatility, GDI Integrated is 1.91 times less risky than Aimia. It trades about 0.18 of its potential returns per unit of risk. Aimia Inc is currently generating about 0.2 of returns per unit of risk over similar time horizon. If you would invest  237.00  in Aimia Inc on September 24, 2024 and sell it today you would earn a total of  18.00  from holding Aimia Inc or generate 7.59% return on investment over 90 days.

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

GDI Integrated  vs.  Aimia Inc

GDI Integrated

Risk-Adjusted Performance

2 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in GDI Integrated are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. In spite of very healthy forward indicators, GDI Integrated is not utilizing all of its potentials. The current stock price disarray, may contribute to short-term losses for the investors.

Aimia Inc

Risk-Adjusted Performance

0 of 100

Very Weak

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

Pair Trading with GDI Integrated and Aimia

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

The idea behind GDI Integrated and Aimia 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 Latest Portfolios module to quick portfolio dashboard that showcases your latest portfolios.