Correlation Between GMS and CHKEZ Old

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

By analyzing existing cross correlation between GMS Inc and CHKEZ Old, you can compare the effects of market volatilities on GMS and CHKEZ Old 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 CHKEZ Old. Check out your portfolio center. Please also check ongoing floating volatility patterns of GMS and CHKEZ Old.

Diversification Opportunities for GMS and CHKEZ Old

0.0

Correlation Coefficient

GMS  CHKEZ Old

Pay attention - limited upside

The 3 months correlation between GMS and CHKEZ is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding GMS Inc and CHKEZ Old in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CHKEZ Old 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 CHKEZ Old. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CHKEZ Old has no effect on the direction of GMS i.e., GMS and CHKEZ Old go up and down completely randomly.

Pair Corralation between GMS and CHKEZ Old

If you would invest (100.00) in CHKEZ Old on December 28, 2024 and sell it today you would earn a total of  100.00  from holding CHKEZ Old or generate -100.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	0.0%
Values	Daily Returns

GMS Inc  vs.  CHKEZ Old

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 latest weak performance, the Stock's primary indicators remain stable and the newest uproar on Wall Street may also be a sign of mid-term gains for the firm private investors.

CHKEZ Old

Risk-Adjusted Performance

Very Weak

Over the last 90 days CHKEZ Old has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly strong technical and fundamental indicators, CHKEZ Old is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with GMS and CHKEZ Old

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

The idea behind GMS Inc and CHKEZ Old 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 FinTech Suite module to use AI to screen and filter profitable investment opportunities.