Correlation Between Stagwell and GMS
Can any of the company-specific risk be diversified away by investing in both Stagwell and GMS 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 Stagwell and GMS into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Stagwell and GMS Inc, you can compare the effects of market volatilities on Stagwell and GMS 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 Stagwell with a short position of GMS. Check out your portfolio center. Please also check ongoing floating volatility patterns of Stagwell and GMS.
Diversification Opportunities for Stagwell and GMS
Very poor diversification
The 3 months correlation between Stagwell and GMS is 0.85. Overlapping area represents the amount of risk that can be diversified away by holding Stagwell and GMS Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on GMS Inc and Stagwell 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 Stagwell are associated (or correlated) with GMS. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of GMS Inc has no effect on the direction of Stagwell i.e., Stagwell and GMS go up and down completely randomly.
Pair Corralation between Stagwell and GMS
Given the investment horizon of 90 days Stagwell is expected to generate 1.43 times more return on investment than GMS. However, Stagwell is 1.43 times more volatile than GMS Inc. It trades about -0.09 of its potential returns per unit of risk. GMS Inc is currently generating about -0.15 per unit of risk. If you would invest 694.00 in Stagwell on December 18, 2024 and sell it today you would lose (92.00) from holding Stagwell or give up 13.26% of portfolio value over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Strong |
Accuracy | 100.0% |
Values | Daily Returns |
Stagwell vs. GMS Inc
Performance |
Timeline |
Stagwell |
GMS Inc |
Stagwell and GMS Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Stagwell and GMS
The main advantage of trading using opposite Stagwell and GMS positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Stagwell position performs unexpectedly, GMS 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 GMS will offset losses from the drop in GMS's long position.Stagwell vs. Interpublic Group of | Stagwell vs. Cimpress NV | Stagwell vs. Criteo Sa | Stagwell vs. Omnicom Group |
GMS vs. Quanex Building Products | GMS vs. Apogee Enterprises | GMS vs. Azek Company | GMS vs. Beacon Roofing Supply |
Check out your portfolio center.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 Center module to all portfolio management and optimization tools to improve performance of your portfolios.
Other Complementary Tools
Alpha Finder Use alpha and beta coefficients to find investment opportunities after accounting for the risk | |
Sync Your Broker Sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors. | |
Price Ceiling Movement Calculate and plot Price Ceiling Movement for different equity instruments | |
Stock Screener Find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook. | |
Share Portfolio Track or share privately all of your investments from the convenience of any device |