Correlation Between GDI Integrated and Ag Growth

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

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

Diversification Opportunities for GDI Integrated and Ag Growth

0.26

Correlation Coefficient

GDI Integrated  Ag Growth

Modest diversification

The 3 months correlation between GDI and AFN is 0.26. Overlapping area represents the amount of risk that can be diversified away by holding GDI Integrated and Ag Growth International in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ag Growth International 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 Ag Growth. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ag Growth International has no effect on the direction of GDI Integrated i.e., GDI Integrated and Ag Growth go up and down completely randomly.

Pair Corralation between GDI Integrated and Ag Growth

Assuming the 90 days trading horizon GDI Integrated is expected to generate 4.8 times less return on investment than Ag Growth. But when comparing it to its historical volatility, GDI Integrated is 1.01 times less risky than Ag Growth. It trades about 0.06 of its potential returns per unit of risk. Ag Growth International is currently generating about 0.27 of returns per unit of risk over similar time horizon. If you would invest  3,171  in Ag Growth International on April 21, 2025 and sell it today you would earn a total of  1,131  from holding Ag Growth International or generate 35.67% return on investment over 90 days.

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

GDI Integrated  vs.  Ag Growth International

GDI Integrated

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in GDI Integrated are ranked lower than 4 (%) 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 August 2025.

Ag Growth International

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Ag Growth International are ranked lower than 21 (%) of all global equities and portfolios over the last 90 days. In spite of very unfluctuating basic indicators, Ag Growth displayed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with GDI Integrated and Ag Growth

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

The idea behind GDI Integrated and Ag Growth International 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 Portfolio Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.