Correlation Between GMS and Getty Realty
Can any of the company-specific risk be diversified away by investing in both GMS and Getty Realty 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 Getty Realty into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between GMS Inc and Getty Realty, you can compare the effects of market volatilities on GMS and Getty Realty 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 Getty Realty. Check out your portfolio center. Please also check ongoing floating volatility patterns of GMS and Getty Realty.
Diversification Opportunities for GMS and Getty Realty
0.81 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between GMS and Getty is 0.81. Overlapping area represents the amount of risk that can be diversified away by holding GMS Inc and Getty Realty in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Getty Realty 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 Getty Realty. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Getty Realty has no effect on the direction of GMS i.e., GMS and Getty Realty go up and down completely randomly.
Pair Corralation between GMS and Getty Realty
Considering the 90-day investment horizon GMS Inc is expected to generate 1.45 times more return on investment than Getty Realty. However, GMS is 1.45 times more volatile than Getty Realty. It trades about 0.05 of its potential returns per unit of risk. Getty Realty is currently generating about 0.0 per unit of risk. If you would invest 5,788 in GMS Inc on November 28, 2024 and sell it today you would earn a total of 2,232 from holding GMS Inc or generate 38.56% 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. Getty Realty
Performance |
| Timeline |
| GMS Inc |
| Getty Realty |
GMS and Getty Realty Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with GMS and Getty Realty
The main advantage of trading using opposite GMS and Getty Realty positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if GMS position performs unexpectedly, Getty Realty 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 Getty Realty will offset losses from the drop in Getty Realty's long position.| GMS vs. Quanex Building Products | GMS vs. Apogee Enterprises | GMS vs. Azek Company | GMS vs. Beacon Roofing Supply |
| Getty Realty vs. Regency Centers | Getty Realty vs. Site Centers Corp | Getty Realty vs. Brixmor Property | Getty Realty vs. Tanger Factory Outlet |
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 USA ETFs module to find actively traded Exchange Traded Funds (ETF) in USA.
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