Correlation Between GDI Integrated and Neptune Digital

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

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

Diversification Opportunities for GDI Integrated and Neptune Digital

-0.36

Correlation Coefficient

GDI Integrated  Neptune Digital

Very good diversification

The 3 months correlation between GDI and Neptune is -0.36. Overlapping area represents the amount of risk that can be diversified away by holding GDI Integrated and Neptune Digital Assets in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Neptune Digital Assets 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 Neptune Digital. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Neptune Digital Assets has no effect on the direction of GDI Integrated i.e., GDI Integrated and Neptune Digital go up and down completely randomly.

Pair Corralation between GDI Integrated and Neptune Digital

Assuming the 90 days trading horizon GDI Integrated is expected to under-perform the Neptune Digital. But the stock apears to be less risky and, when comparing its historical volatility, GDI Integrated is 3.61 times less risky than Neptune Digital. The stock trades about -0.05 of its potential returns per unit of risk. The Neptune Digital Assets is currently generating about 0.12 of returns per unit of risk over similar time horizon. If you would invest  101.00  in Neptune Digital Assets on December 28, 2024 and sell it today you would earn a total of  61.00  from holding Neptune Digital Assets or generate 60.4% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	98.41%
Values	Daily Returns

GDI Integrated  vs.  Neptune Digital Assets

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 latest weak performance, the Stock's forward indicators remain healthy and the recent disarray on Wall Street may also be a sign of long period gains for the firm investors.

Neptune Digital Assets

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Neptune Digital Assets are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. In spite of fairly weak basic indicators, Neptune Digital showed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with GDI Integrated and Neptune Digital

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

The idea behind GDI Integrated and Neptune Digital Assets 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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.