Correlation Between GMS and Ainsworth Game
Can any of the company-specific risk be diversified away by investing in both GMS and Ainsworth Game 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 Ainsworth Game into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between GMS Inc and Ainsworth Game Technology, you can compare the effects of market volatilities on GMS and Ainsworth Game 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 Ainsworth Game. Check out your portfolio center. Please also check ongoing floating volatility patterns of GMS and Ainsworth Game.
Diversification Opportunities for GMS and Ainsworth Game
-0.81 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between GMS and Ainsworth is -0.81. Overlapping area represents the amount of risk that can be diversified away by holding GMS Inc and Ainsworth Game Technology in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ainsworth Game Technology 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 Ainsworth Game. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ainsworth Game Technology has no effect on the direction of GMS i.e., GMS and Ainsworth Game go up and down completely randomly.
Pair Corralation between GMS and Ainsworth Game
Considering the 90-day investment horizon GMS Inc is expected to generate 1.06 times more return on investment than Ainsworth Game. However, GMS is 1.06 times more volatile than Ainsworth Game Technology. It trades about 0.28 of its potential returns per unit of risk. Ainsworth Game Technology is currently generating about 0.01 per unit of risk. If you would invest 9,161 in GMS Inc on September 5, 2024 and sell it today you would earn a total of 1,107 from holding GMS Inc or generate 12.08% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
GMS Inc vs. Ainsworth Game Technology
Performance |
| Timeline |
| GMS Inc |
| Ainsworth Game Technology |
GMS and Ainsworth Game Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with GMS and Ainsworth Game
The main advantage of trading using opposite GMS and Ainsworth Game positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if GMS position performs unexpectedly, Ainsworth Game 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 Ainsworth Game will offset losses from the drop in Ainsworth Game's long position.| GMS vs. Quanex Building Products | GMS vs. Apogee Enterprises | GMS vs. Azek Company | GMS vs. Beacon Roofing Supply |
| Ainsworth Game vs. Intema Solutions | Ainsworth Game vs. 888 Holdings | Ainsworth Game vs. Royal Wins | Ainsworth Game vs. Real Luck Group |
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 Financial Widgets module to easily integrated Macroaxis content with over 30 different plug-and-play financial widgets.
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