Correlation Between GDI Integrated and Wesdome Gold

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

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

Diversification Opportunities for GDI Integrated and Wesdome Gold

-0.8

Correlation Coefficient

GDI Integrated  Wesdome Gold

Pay attention - limited upside

The 3 months correlation between GDI and Wesdome is -0.8. Overlapping area represents the amount of risk that can be diversified away by holding GDI Integrated and Wesdome Gold Mines in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Wesdome Gold Mines 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 Wesdome Gold. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Wesdome Gold Mines has no effect on the direction of GDI Integrated i.e., GDI Integrated and Wesdome Gold go up and down completely randomly.

Pair Corralation between GDI Integrated and Wesdome Gold

Assuming the 90 days trading horizon GDI Integrated is expected to under-perform the Wesdome Gold. In addition to that, GDI Integrated is 1.17 times more volatile than Wesdome Gold Mines. It trades about -0.08 of its total potential returns per unit of risk. Wesdome Gold Mines is currently generating about 0.21 per unit of volatility. If you would invest  1,264  in Wesdome Gold Mines on December 29, 2024 and sell it today you would earn a total of  420.00  from holding Wesdome Gold Mines or generate 33.23% return on investment over 90 days.

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

GDI Integrated  vs.  Wesdome Gold Mines

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.

Wesdome Gold Mines

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Wesdome Gold Mines are ranked lower than 16 (%) of all global equities and portfolios over the last 90 days. In spite of very unfluctuating basic indicators, Wesdome Gold displayed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with GDI Integrated and Wesdome Gold

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

The idea behind GDI Integrated and Wesdome Gold Mines 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 Price Transformation module to use Price Transformation models to analyze the depth of different equity instruments across global markets.