Correlation Between GMS and 532457BY3

Can any of the company-specific risk be diversified away by investing in both GMS and 532457BY3 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 532457BY3 into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between GMS Inc and ELI LILLY AND, you can compare the effects of market volatilities on GMS and 532457BY3 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 532457BY3. Check out your portfolio center. Please also check ongoing floating volatility patterns of GMS and 532457BY3.

Diversification Opportunities for GMS and 532457BY3

-0.31

Correlation Coefficient

GMS  532457BY3

Very good diversification

The 3 months correlation between GMS and 532457BY3 is -0.31. Overlapping area represents the amount of risk that can be diversified away by holding GMS Inc and ELI LILLY AND in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ELI LILLY AND 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 532457BY3. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ELI LILLY AND has no effect on the direction of GMS i.e., GMS and 532457BY3 go up and down completely randomly.

Pair Corralation between GMS and 532457BY3

Considering the 90-day investment horizon GMS Inc is expected to under-perform the 532457BY3. In addition to that, GMS is 1.36 times more volatile than ELI LILLY AND. It trades about -0.16 of its total potential returns per unit of risk. ELI LILLY AND is currently generating about 0.15 per unit of volatility. If you would invest  5,674  in ELI LILLY AND on December 22, 2024 and sell it today you would earn a total of  637.00  from holding ELI LILLY AND or generate 11.23% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	96.67%
Values	Daily Returns

GMS Inc  vs.  ELI LILLY AND

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.

ELI LILLY AND

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in ELI LILLY AND are ranked lower than 11 (%) of all global equities and portfolios over the last 90 days. Despite somewhat conflicting basic indicators, 532457BY3 may actually be approaching a critical reversion point that can send shares even higher in April 2025.

Pair Trading with GMS and 532457BY3

The main advantage of trading using opposite GMS and 532457BY3 positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if GMS position performs unexpectedly, 532457BY3 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 532457BY3 will offset losses from the drop in 532457BY3's long position.

The idea behind GMS Inc and ELI LILLY AND 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 Competition Analyzer module to analyze and compare many basic indicators for a group of related or unrelated entities.