Correlation Between GMS and View

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

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

Diversification Opportunities for GMS and View

0.0

Correlation Coefficient

GMS  View

Pay attention - limited upside

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

Pair Corralation between GMS and View

If you would invest (100.00) in View Inc on December 26, 2024 and sell it today you would earn a total of  100.00  from holding View Inc 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.  View Inc

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.

View Inc

Risk-Adjusted Performance

Very Weak

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

Pair Trading with GMS and View

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

The idea behind GMS Inc and View Inc 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 Portfolio Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.