Correlation Between Marblegate Acquisition and GMS
Can any of the company-specific risk be diversified away by investing in both Marblegate Acquisition 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 Marblegate Acquisition and GMS into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Marblegate Acquisition Corp and GMS Inc, you can compare the effects of market volatilities on Marblegate Acquisition 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 Marblegate Acquisition with a short position of GMS. Check out your portfolio center. Please also check ongoing floating volatility patterns of Marblegate Acquisition and GMS.
Diversification Opportunities for Marblegate Acquisition and GMS
0.55 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Marblegate and GMS is 0.55. Overlapping area represents the amount of risk that can be diversified away by holding Marblegate Acquisition Corp and GMS Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on GMS Inc and Marblegate Acquisition 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 Marblegate Acquisition Corp 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 Marblegate Acquisition i.e., Marblegate Acquisition and GMS go up and down completely randomly.
Pair Corralation between Marblegate Acquisition and GMS
Assuming the 90 days horizon Marblegate Acquisition is expected to generate 9.98 times less return on investment than GMS. But when comparing it to its historical volatility, Marblegate Acquisition Corp is 2.48 times less risky than GMS. It trades about 0.07 of its potential returns per unit of risk. GMS Inc is currently generating about 0.27 of returns per unit of risk over similar time horizon. If you would invest 9,203 in GMS Inc on August 27, 2024 and sell it today you would earn a total of 967.00 from holding GMS Inc or generate 10.51% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Marblegate Acquisition Corp vs. GMS Inc
Performance |
| Timeline |
| Marblegate Acquisition |
| GMS Inc |
Marblegate Acquisition and GMS Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Marblegate Acquisition and GMS
The main advantage of trading using opposite Marblegate Acquisition and GMS positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Marblegate Acquisition 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.| Marblegate Acquisition vs. GMS Inc | Marblegate Acquisition vs. Merit Medical Systems | Marblegate Acquisition vs. RadNet Inc | Marblegate Acquisition vs. BioNTech SE |
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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 Portfolio Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.
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