Correlation Between GMS and Apogee Enterprises
Can any of the company-specific risk be diversified away by investing in both GMS and Apogee Enterprises 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 Apogee Enterprises into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between GMS Inc and Apogee Enterprises, you can compare the effects of market volatilities on GMS and Apogee Enterprises 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 Apogee Enterprises. Check out your portfolio center. Please also check ongoing floating volatility patterns of GMS and Apogee Enterprises.
Diversification Opportunities for GMS and Apogee Enterprises
0.87 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between GMS and Apogee is 0.87. Overlapping area represents the amount of risk that can be diversified away by holding GMS Inc and Apogee Enterprises in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Apogee Enterprises 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 Apogee Enterprises. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Apogee Enterprises has no effect on the direction of GMS i.e., GMS and Apogee Enterprises go up and down completely randomly.
Pair Corralation between GMS and Apogee Enterprises
Considering the 90-day investment horizon GMS Inc is expected to generate 0.28 times more return on investment than Apogee Enterprises. However, GMS Inc is 3.53 times less risky than Apogee Enterprises. It trades about 0.07 of its potential returns per unit of risk. Apogee Enterprises is currently generating about -0.3 per unit of risk. If you would invest 8,295 in GMS Inc on November 5, 2024 and sell it today you would earn a total of 139.00 from holding GMS Inc or generate 1.68% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
GMS Inc vs. Apogee Enterprises
Performance |
| Timeline |
| GMS Inc |
| Apogee Enterprises |
GMS and Apogee Enterprises Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with GMS and Apogee Enterprises
The main advantage of trading using opposite GMS and Apogee Enterprises positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if GMS position performs unexpectedly, Apogee Enterprises 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 Apogee Enterprises will offset losses from the drop in Apogee Enterprises' long position.| GMS vs. Quanex Building Products | GMS vs. Apogee Enterprises | GMS vs. Azek Company | GMS vs. Beacon Roofing Supply |
| Apogee Enterprises vs. Quanex Building Products | Apogee Enterprises vs. Janus International Group | Apogee Enterprises vs. Interface | Apogee Enterprises vs. Azek Company |
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 Dashboard module to portfolio dashboard that provides centralized access to all your investments.
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