Correlation Between GDI Integrated and Klondike Silver

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

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

Diversification Opportunities for GDI Integrated and Klondike Silver

-0.42

Correlation Coefficient

GDI Integrated  Klondike Silver

Very good diversification

The 3 months correlation between GDI and Klondike is -0.42. Overlapping area represents the amount of risk that can be diversified away by holding GDI Integrated and Klondike Silver Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Klondike Silver 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 Klondike Silver. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Klondike Silver Corp has no effect on the direction of GDI Integrated i.e., GDI Integrated and Klondike Silver go up and down completely randomly.

Pair Corralation between GDI Integrated and Klondike Silver

Assuming the 90 days trading horizon GDI Integrated is expected to under-perform the Klondike Silver. But the stock apears to be less risky and, when comparing its historical volatility, GDI Integrated is 6.65 times less risky than Klondike Silver. The stock trades about -0.02 of its potential returns per unit of risk. The Klondike Silver Corp is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest  4.00  in Klondike Silver Corp on October 5, 2024 and sell it today you would lose (2.00) from holding Klondike Silver Corp or give up 50.0% of portfolio value over 90 days.

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

GDI Integrated  vs.  Klondike Silver Corp

GDI Integrated

Risk-Adjusted Performance

9 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in GDI Integrated are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. In spite of very unfluctuating forward indicators, GDI Integrated may actually be approaching a critical reversion point that can send shares even higher in February 2025.

Klondike Silver Corp

Risk-Adjusted Performance

2 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Klondike Silver Corp are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. In spite of fairly abnormal basic indicators, Klondike Silver showed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with GDI Integrated and Klondike Silver

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

The idea behind GDI Integrated and Klondike Silver 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.

Check out your portfolio center.

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 Portfolio Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.