Correlation Between Broadstone Net and GMS
Can any of the company-specific risk be diversified away by investing in both Broadstone Net 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 Broadstone Net and GMS into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Broadstone Net Lease and GMS Inc, you can compare the effects of market volatilities on Broadstone Net 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 Broadstone Net with a short position of GMS. Check out your portfolio center. Please also check ongoing floating volatility patterns of Broadstone Net and GMS.
Diversification Opportunities for Broadstone Net and GMS
-0.57 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Broadstone and GMS is -0.57. Overlapping area represents the amount of risk that can be diversified away by holding Broadstone Net Lease and GMS Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on GMS Inc and Broadstone Net 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 Broadstone Net Lease 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 Broadstone Net i.e., Broadstone Net and GMS go up and down completely randomly.
Pair Corralation between Broadstone Net and GMS
Considering the 90-day investment horizon Broadstone Net Lease is expected to under-perform the GMS. But the stock apears to be less risky and, when comparing its historical volatility, Broadstone Net Lease is 2.19 times less risky than GMS. The stock trades about -0.08 of its potential returns per unit of risk. The GMS Inc is currently generating about 0.23 of returns per unit of risk over similar time horizon. If you would invest 9,161 in GMS Inc on September 4, 2024 and sell it today you would earn a total of 852.00 from holding GMS Inc or generate 9.3% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Broadstone Net Lease vs. GMS Inc
Performance |
| Timeline |
| Broadstone Net Lease |
| GMS Inc |
Broadstone Net and GMS Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Broadstone Net and GMS
The main advantage of trading using opposite Broadstone Net and GMS positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Broadstone Net 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.| Broadstone Net vs. Boston Properties | Broadstone Net vs. Douglas Emmett | Broadstone Net vs. Alexandria Real Estate | Broadstone Net vs. Vornado Realty Trust |
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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 Companies Directory module to evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals.
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