Correlation Between GMS and 458140CA6

Can any of the company-specific risk be diversified away by investing in both GMS and 458140CA6 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 458140CA6 into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between GMS Inc and INTC 415 05 AUG 32, you can compare the effects of market volatilities on GMS and 458140CA6 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 458140CA6. Check out your portfolio center. Please also check ongoing floating volatility patterns of GMS and 458140CA6.

Diversification Opportunities for GMS and 458140CA6

0.42

Correlation Coefficient

GMS  458140CA6

Very weak diversification

The 3 months correlation between GMS and 458140CA6 is 0.42. Overlapping area represents the amount of risk that can be diversified away by holding GMS Inc and INTC 415 05 AUG 32 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on INTC 415 05 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 458140CA6. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of INTC 415 05 has no effect on the direction of GMS i.e., GMS and 458140CA6 go up and down completely randomly.

Pair Corralation between GMS and 458140CA6

Considering the 90-day investment horizon GMS Inc is expected to under-perform the 458140CA6. In addition to that, GMS is 2.14 times more volatile than INTC 415 05 AUG 32. It trades about -0.24 of its total potential returns per unit of risk. INTC 415 05 AUG 32 is currently generating about -0.03 per unit of volatility. If you would invest  9,435  in INTC 415 05 AUG 32 on December 2, 2024 and sell it today you would lose (160.00) from holding INTC 415 05 AUG 32 or give up 1.7% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	96.83%
Values	Daily Returns

GMS Inc  vs.  INTC 415 05 AUG 32

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.

INTC 415 05

Risk-Adjusted Performance

Very Weak

Over the last 90 days INTC 415 05 AUG 32 has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong basic indicators, 458140CA6 is not utilizing all of its potentials. The latest stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with GMS and 458140CA6

The main advantage of trading using opposite GMS and 458140CA6 positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if GMS position performs unexpectedly, 458140CA6 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 458140CA6 will offset losses from the drop in 458140CA6's long position.

The idea behind GMS Inc and INTC 415 05 AUG 32 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 .