Correlation Between GMS and Brenmiller Energy

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

By analyzing existing cross correlation between GMS Inc and Brenmiller Energy Ltd, you can compare the effects of market volatilities on GMS and Brenmiller Energy 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 GMS with a short position of Brenmiller Energy. Check out your portfolio center. Please also check ongoing floating volatility patterns of GMS and Brenmiller Energy.

Diversification Opportunities for GMS and Brenmiller Energy

-0.05

Correlation Coefficient

GMS  Brenmiller Energy

Good diversification

The 3 months correlation between GMS and Brenmiller is -0.05. Overlapping area represents the amount of risk that can be diversified away by holding GMS Inc and Brenmiller Energy Ltd in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Brenmiller Energy and GMS 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 GMS Inc are associated (or correlated) with Brenmiller Energy. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Brenmiller Energy has no effect on the direction of GMS i.e., GMS and Brenmiller Energy go up and down completely randomly.

Pair Corralation between GMS and Brenmiller Energy

Considering the 90-day investment horizon GMS Inc is expected to under-perform the Brenmiller Energy. But the stock apears to be less risky and, when comparing its historical volatility, GMS Inc is 6.22 times less risky than Brenmiller Energy. The stock trades about -0.12 of its potential returns per unit of risk. The Brenmiller Energy Ltd is currently generating about 0.1 of returns per unit of risk over similar time horizon. If you would invest  107.00  in Brenmiller Energy Ltd on December 25, 2024 and sell it today you would earn a total of  35.00  from holding Brenmiller Energy Ltd or generate 32.71% return on investment over 90 days.

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

GMS Inc  vs.  Brenmiller Energy Ltd

GMS Inc

Risk-Adjusted Performance

Very Weak

Over the last 90 days GMS Inc 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 primary indicators remain comparatively stable which may send shares a bit higher in April 2025. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.

Brenmiller Energy

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Brenmiller Energy Ltd are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. Despite nearly weak basic indicators, Brenmiller Energy reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with GMS and Brenmiller Energy

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

The idea behind GMS Inc and Brenmiller Energy Ltd 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 Analyst Advice module to analyst recommendations and target price estimates broken down by several categories.