Correlation Between GDI Integrated and Pollard Banknote

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

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

Diversification Opportunities for GDI Integrated and Pollard Banknote

-0.03

Correlation Coefficient

GDI Integrated  Pollard Banknote

Good diversification

The 3 months correlation between GDI and Pollard is -0.03. Overlapping area represents the amount of risk that can be diversified away by holding GDI Integrated and Pollard Banknote Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Pollard Banknote 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 Pollard Banknote. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Pollard Banknote has no effect on the direction of GDI Integrated i.e., GDI Integrated and Pollard Banknote go up and down completely randomly.

Pair Corralation between GDI Integrated and Pollard Banknote

Assuming the 90 days trading horizon GDI Integrated is expected to generate 2.78 times less return on investment than Pollard Banknote. But when comparing it to its historical volatility, GDI Integrated is 1.14 times less risky than Pollard Banknote. It trades about 0.06 of its potential returns per unit of risk. Pollard Banknote Limited is currently generating about 0.15 of returns per unit of risk over similar time horizon. If you would invest  1,808  in Pollard Banknote Limited on April 22, 2025 and sell it today you would earn a total of  367.00  from holding Pollard Banknote Limited or generate 20.3% return on investment over 90 days.

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

GDI Integrated  vs.  Pollard Banknote Limited

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.

Pollard Banknote

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Pollard Banknote Limited are ranked lower than 11 (%) of all global equities and portfolios over the last 90 days. In spite of very weak essential indicators, Pollard Banknote displayed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with GDI Integrated and Pollard Banknote

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

The idea behind GDI Integrated and Pollard Banknote Limited 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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.