Correlation Between GMS and Canlan Ice
Can any of the company-specific risk be diversified away by investing in both GMS and Canlan Ice 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 Canlan Ice into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between GMS Inc and Canlan Ice Sports, you can compare the effects of market volatilities on GMS and Canlan Ice 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 Canlan Ice. Check out your portfolio center. Please also check ongoing floating volatility patterns of GMS and Canlan Ice.
Diversification Opportunities for GMS and Canlan Ice
-0.75 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between GMS and Canlan is -0.75. Overlapping area represents the amount of risk that can be diversified away by holding GMS Inc and Canlan Ice Sports in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Canlan Ice Sports 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 Canlan Ice. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Canlan Ice Sports has no effect on the direction of GMS i.e., GMS and Canlan Ice go up and down completely randomly.
Pair Corralation between GMS and Canlan Ice
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 Against |
| Strength | Weak |
| Accuracy | 95.0% |
| Values | Daily Returns |
GMS Inc vs. Canlan Ice Sports
Performance |
| Timeline |
| GMS Inc |
| Canlan Ice Sports |
GMS and Canlan Ice Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with GMS and Canlan Ice
The main advantage of trading using opposite GMS and Canlan Ice positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if GMS position performs unexpectedly, Canlan Ice 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 Canlan Ice will offset losses from the drop in Canlan Ice's long position.| GMS vs. Quanex Building Products | GMS vs. Apogee Enterprises | GMS vs. Azek Company | GMS vs. Beacon Roofing Supply |
| Canlan Ice vs. SmartStop Self Storage | Canlan Ice vs. Bm Technologies | Canlan Ice vs. Cadence Design Systems | Canlan Ice vs. Centessa Pharmaceuticals PLC |
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 FinTech Suite module to use AI to screen and filter profitable investment opportunities.
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