Correlation Between GDI Integrated and IT Link

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

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

Diversification Opportunities for GDI Integrated and IT Link

0.19

Correlation Coefficient

GDI Integrated  IT Link

Average diversification

The 3 months correlation between GDI and ALITL is 0.19. Overlapping area represents the amount of risk that can be diversified away by holding GDI Integrated and IT Link in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on IT Link 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 IT Link. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of IT Link has no effect on the direction of GDI Integrated i.e., GDI Integrated and IT Link go up and down completely randomly.

Pair Corralation between GDI Integrated and IT Link

Assuming the 90 days trading horizon GDI Integrated is expected to generate 2.49 times less return on investment than IT Link. In addition to that, GDI Integrated is 1.16 times more volatile than IT Link. It trades about 0.06 of its total potential returns per unit of risk. IT Link is currently generating about 0.17 per unit of volatility. If you would invest  2,312  in IT Link on April 20, 2025 and sell it today you would earn a total of  398.00  from holding IT Link or generate 17.21% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	98.44%
Values	Daily Returns

GDI Integrated  vs.  IT Link

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.

IT Link

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in IT Link are ranked lower than 13 (%) of all global equities and portfolios over the last 90 days. Even with relatively weak basic indicators, IT Link reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with GDI Integrated and IT Link

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

The idea behind GDI Integrated and IT Link 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 Commodity Channel module to use Commodity Channel Index to analyze current equity momentum.