Correlation Between GMS and First Republic
Can any of the company-specific risk be diversified away by investing in both GMS and First Republic 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 First Republic into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between GMS Inc and First Republic Bank, you can compare the effects of market volatilities on GMS and First Republic 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 First Republic. Check out your portfolio center. Please also check ongoing floating volatility patterns of GMS and First Republic.
Diversification Opportunities for GMS and First Republic
-0.48 | Correlation Coefficient |
Very good diversification
The 3 months correlation between GMS and First is -0.48. Overlapping area represents the amount of risk that can be diversified away by holding GMS Inc and First Republic Bank in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on First Republic Bank 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 First Republic. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of First Republic Bank has no effect on the direction of GMS i.e., GMS and First Republic go up and down completely randomly.
Pair Corralation between GMS and First Republic
If you would invest 9,171 in GMS Inc on September 3, 2024 and sell it today you would earn a total of 864.00 from holding GMS Inc or generate 9.42% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 0.8% |
| Values | Daily Returns |
GMS Inc vs. First Republic Bank
Performance |
| Timeline |
| GMS Inc |
| First Republic Bank |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
GMS and First Republic Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with GMS and First Republic
The main advantage of trading using opposite GMS and First Republic positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if GMS position performs unexpectedly, First Republic 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 First Republic will offset losses from the drop in First Republic's long position.| GMS vs. Quanex Building Products | GMS vs. Apogee Enterprises | GMS vs. Azek Company | GMS vs. Beacon Roofing Supply |
| First Republic vs. Flexible Solutions International | First Republic vs. Luxfer Holdings PLC | First Republic vs. Jutal Offshore Oil | First Republic vs. GMS Inc |
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 Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.
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