Correlation Between GMS and NSANY

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

By analyzing existing cross correlation between GMS Inc and NSANY 275 09 MAR 28, you can compare the effects of market volatilities on GMS and NSANY 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 NSANY. Check out your portfolio center. Please also check ongoing floating volatility patterns of GMS and NSANY.

Diversification Opportunities for GMS and NSANY

-0.33

Correlation Coefficient

GMS  NSANY

Very good diversification

The 3 months correlation between GMS and NSANY is -0.33. Overlapping area represents the amount of risk that can be diversified away by holding GMS Inc and NSANY 275 09 MAR 28 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on NSANY 275 09 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 NSANY. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of NSANY 275 09 has no effect on the direction of GMS i.e., GMS and NSANY go up and down completely randomly.

Pair Corralation between GMS and NSANY

Considering the 90-day investment horizon GMS Inc is expected to under-perform the NSANY. In addition to that, GMS is 3.08 times more volatile than NSANY 275 09 MAR 28. It trades about -0.05 of its total potential returns per unit of risk. NSANY 275 09 MAR 28 is currently generating about 0.01 per unit of volatility. If you would invest  9,041  in NSANY 275 09 MAR 28 on October 24, 2024 and sell it today you would earn a total of  15.00  from holding NSANY 275 09 MAR 28 or generate 0.17% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	80.0%
Values	Daily Returns

GMS Inc  vs.  NSANY 275 09 MAR 28

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.

NSANY 275 09

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days NSANY 275 09 MAR 28 has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong basic indicators, NSANY 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 NSANY

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

The idea behind GMS Inc and NSANY 275 09 MAR 28 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 Aroon Oscillator module to analyze current equity momentum using Aroon Oscillator and other momentum ratios.