Correlation Between GMS and ENELIM

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

By analyzing existing cross correlation between GMS Inc and ENELIM 2875 12 JUL 41, you can compare the effects of market volatilities on GMS and ENELIM 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 ENELIM. Check out your portfolio center. Please also check ongoing floating volatility patterns of GMS and ENELIM.

Diversification Opportunities for GMS and ENELIM

0.29

Correlation Coefficient

GMS  ENELIM

Modest diversification

The 3 months correlation between GMS and ENELIM is 0.29. Overlapping area represents the amount of risk that can be diversified away by holding GMS Inc and ENELIM 2875 12 JUL 41 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ENELIM 2875 12 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 ENELIM. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ENELIM 2875 12 has no effect on the direction of GMS i.e., GMS and ENELIM go up and down completely randomly.

Pair Corralation between GMS and ENELIM

Considering the 90-day investment horizon GMS Inc is expected to generate 1.47 times more return on investment than ENELIM. However, GMS is 1.47 times more volatile than ENELIM 2875 12 JUL 41. It trades about 0.06 of its potential returns per unit of risk. ENELIM 2875 12 JUL 41 is currently generating about 0.03 per unit of risk. If you would invest  5,163  in GMS Inc on September 29, 2024 and sell it today you would earn a total of  3,321  from holding GMS Inc or generate 64.32% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	43.55%
Values	Daily Returns

GMS Inc  vs.  ENELIM 2875 12 JUL 41

GMS Inc

Risk-Adjusted Performance

0 of 100

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 comparatively stable primary indicators, GMS is not utilizing all of its potentials. The current stock price uproar, may contribute to short-horizon losses for the private investors.

ENELIM 2875 12

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days ENELIM 2875 12 JUL 41 has generated negative risk-adjusted returns adding no value to investors with long positions. Despite conflicting performance in the last few months, the Bond's basic indicators remain somewhat strong which may send shares a bit higher in January 2025. The current disturbance may also be a sign of long term up-swing for ENELIM 2875 12 JUL 41 investors.

Pair Trading with GMS and ENELIM

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

The idea behind GMS Inc and ENELIM 2875 12 JUL 41 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 Optimizer module to use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio .