Correlation Between GDI Integrated and Richards Packaging

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

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

Diversification Opportunities for GDI Integrated and Richards Packaging

-0.04

Correlation Coefficient

GDI Integrated  Richards Packaging

Good diversification

The 3 months correlation between GDI and Richards is -0.04. Overlapping area represents the amount of risk that can be diversified away by holding GDI Integrated and Richards Packaging Income in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Richards Packaging Income 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 Richards Packaging. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Richards Packaging Income has no effect on the direction of GDI Integrated i.e., GDI Integrated and Richards Packaging go up and down completely randomly.

Pair Corralation between GDI Integrated and Richards Packaging

Assuming the 90 days trading horizon GDI Integrated is expected to generate 2.49 times less return on investment than Richards Packaging. In addition to that, GDI Integrated is 1.6 times more volatile than Richards Packaging Income. It trades about 0.06 of its total potential returns per unit of risk. Richards Packaging Income is currently generating about 0.25 per unit of volatility. If you would invest  2,757  in Richards Packaging Income on April 22, 2025 and sell it today you would earn a total of  523.00  from holding Richards Packaging Income or generate 18.97% 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.  Richards Packaging Income

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.

Richards Packaging Income

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Richards Packaging Income are ranked lower than 19 (%) of all global equities and portfolios over the last 90 days. Despite somewhat unfluctuating forward indicators, Richards Packaging sustained solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with GDI Integrated and Richards Packaging

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

The idea behind GDI Integrated and Richards Packaging Income 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 Balance Of Power module to check stock momentum by analyzing Balance Of Power indicator and other technical ratios.