Correlation Between GDI Integrated and Capstone Mining

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

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

Diversification Opportunities for GDI Integrated and Capstone Mining

-0.44

Correlation Coefficient

GDI Integrated  Capstone Mining

Very good diversification

The 3 months correlation between GDI and Capstone is -0.44. Overlapping area represents the amount of risk that can be diversified away by holding GDI Integrated and Capstone Mining Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Capstone Mining Corp 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 Capstone Mining. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Capstone Mining Corp has no effect on the direction of GDI Integrated i.e., GDI Integrated and Capstone Mining go up and down completely randomly.

Pair Corralation between GDI Integrated and Capstone Mining

Assuming the 90 days trading horizon GDI Integrated is expected to generate 0.66 times more return on investment than Capstone Mining. However, GDI Integrated is 1.52 times less risky than Capstone Mining. It trades about 0.31 of its potential returns per unit of risk. Capstone Mining Corp is currently generating about -0.09 per unit of risk. If you would invest  3,669  in GDI Integrated on October 6, 2024 and sell it today you would earn a total of  331.00  from holding GDI Integrated or generate 9.02% return on investment over 90 days.

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

GDI Integrated  vs.  Capstone Mining Corp

GDI Integrated

Risk-Adjusted Performance

7 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in GDI Integrated are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. In spite of very weak forward indicators, GDI Integrated may actually be approaching a critical reversion point that can send shares even higher in February 2025.

Capstone Mining Corp

Risk-Adjusted Performance

0 of 100

Very Weak

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

Pair Trading with GDI Integrated and Capstone Mining

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

The idea behind GDI Integrated and Capstone Mining Corp 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 Financial Widgets module to easily integrated Macroaxis content with over 30 different plug-and-play financial widgets.