Correlation Between GDI Integrated and IT Link

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

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

Diversification Opportunities for GDI Integrated and IT Link

0.49

Correlation Coefficient

GDI Integrated  IT Link

Very weak diversification

The 3 months correlation between GDI and ALITL is 0.49. Overlapping area represents the amount of risk that can be diversified away by holding GDI Integrated and IT Link in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on IT Link 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 IT Link. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of IT Link has no effect on the direction of GDI Integrated i.e., GDI Integrated and IT Link go up and down completely randomly.

Pair Corralation between GDI Integrated and IT Link

Assuming the 90 days trading horizon GDI Integrated is expected to under-perform the IT Link. In addition to that, GDI Integrated is 1.48 times more volatile than IT Link. It trades about -0.08 of its total potential returns per unit of risk. IT Link is currently generating about -0.03 per unit of volatility. If you would invest  2,540  in IT Link on December 29, 2024 and sell it today you would lose (100.00) from holding IT Link or give up 3.94% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	96.92%
Values	Daily Returns

GDI Integrated  vs.  IT Link

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 weak performance in the last few months, the Stock's forward 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.

IT Link

Risk-Adjusted Performance

Very Weak

Over the last 90 days IT Link has generated negative risk-adjusted returns adding no value to investors with long positions. Even with relatively invariable basic indicators, IT Link is not utilizing all of its potentials. The current stock price agitation, may contribute to short-term losses for the retail investors.

Pair Trading with GDI Integrated and IT Link

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

The idea behind GDI Integrated and IT Link 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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.