Correlation Between GMS and First Ship
Can any of the company-specific risk be diversified away by investing in both GMS and First Ship 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 Ship 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 Ship Lease, you can compare the effects of market volatilities on GMS and First Ship 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 Ship. Check out your portfolio center. Please also check ongoing floating volatility patterns of GMS and First Ship.
Diversification Opportunities for GMS and First Ship
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between GMS and First is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding GMS Inc and First Ship Lease in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on First Ship Lease 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 Ship. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of First Ship Lease has no effect on the direction of GMS i.e., GMS and First Ship go up and down completely randomly.
Pair Corralation between GMS and First Ship
If you would invest 4.00 in First Ship Lease on November 28, 2024 and sell it today you would earn a total of 0.00 from holding First Ship Lease or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 95.45% |
| Values | Daily Returns |
GMS Inc vs. First Ship Lease
Performance |
| Timeline |
| GMS Inc |
| First Ship Lease |
GMS and First Ship Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with GMS and First Ship
The main advantage of trading using opposite GMS and First Ship positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if GMS position performs unexpectedly, First Ship 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 Ship will offset losses from the drop in First Ship's long position.| GMS vs. Quanex Building Products | GMS vs. Apogee Enterprises | GMS vs. Azek Company | GMS vs. Beacon Roofing Supply |
| First Ship vs. Universal Display | First Ship vs. Life Time Group | First Ship vs. Insteel Industries | First Ship vs. American Environmental |
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 Cryptocurrency Center module to build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency.
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