Correlation Between GMS and Cineverse Corp
Can any of the company-specific risk be diversified away by investing in both GMS and Cineverse Corp 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 Cineverse Corp into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between GMS Inc and Cineverse Corp, you can compare the effects of market volatilities on GMS and Cineverse Corp 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 Cineverse Corp. Check out your portfolio center. Please also check ongoing floating volatility patterns of GMS and Cineverse Corp.
Diversification Opportunities for GMS and Cineverse Corp
0.84 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between GMS and Cineverse is 0.84. Overlapping area represents the amount of risk that can be diversified away by holding GMS Inc and Cineverse Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cineverse Corp 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 Cineverse Corp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Cineverse Corp has no effect on the direction of GMS i.e., GMS and Cineverse Corp go up and down completely randomly.
Pair Corralation between GMS and Cineverse Corp
Considering the 90-day investment horizon GMS is expected to generate 10.36 times less return on investment than Cineverse Corp. But when comparing it to its historical volatility, GMS Inc is 3.03 times less risky than Cineverse Corp. It trades about 0.06 of its potential returns per unit of risk. Cineverse Corp is currently generating about 0.21 of returns per unit of risk over similar time horizon. If you would invest 89.00 in Cineverse Corp on September 5, 2024 and sell it today you would earn a total of 288.00 from holding Cineverse Corp or generate 323.6% 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. Cineverse Corp
Performance |
| Timeline |
| GMS Inc |
| Cineverse Corp |
GMS and Cineverse Corp Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with GMS and Cineverse Corp
The main advantage of trading using opposite GMS and Cineverse Corp positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if GMS position performs unexpectedly, Cineverse Corp 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 Cineverse Corp will offset losses from the drop in Cineverse Corp's long position.| GMS vs. Quanex Building Products | GMS vs. Apogee Enterprises | GMS vs. Azek Company | GMS vs. Beacon Roofing Supply |
| Cineverse Corp vs. GMS Inc | Cineverse Corp vs. Westrock Coffee | Cineverse Corp vs. Anheuser Busch Inbev | Cineverse Corp vs. Boston Beer |
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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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