Correlation Between GMS and JBG SMITH
Can any of the company-specific risk be diversified away by investing in both GMS and JBG SMITH 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 JBG SMITH into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between GMS Inc and JBG SMITH Properties, you can compare the effects of market volatilities on GMS and JBG SMITH 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 JBG SMITH. Check out your portfolio center. Please also check ongoing floating volatility patterns of GMS and JBG SMITH.
Diversification Opportunities for GMS and JBG SMITH
Very good diversification
The 3 months correlation between GMS and JBG is -0.46. Overlapping area represents the amount of risk that can be diversified away by holding GMS Inc and JBG SMITH Properties in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on JBG SMITH Properties 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 JBG SMITH. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of JBG SMITH Properties has no effect on the direction of GMS i.e., GMS and JBG SMITH go up and down completely randomly.
Pair Corralation between GMS and JBG SMITH
Considering the 90-day investment horizon GMS Inc is expected to generate 0.92 times more return on investment than JBG SMITH. However, GMS Inc is 1.09 times less risky than JBG SMITH. It trades about 0.09 of its potential returns per unit of risk. JBG SMITH Properties is currently generating about 0.0 per unit of risk. If you would invest 4,833 in GMS Inc on August 24, 2024 and sell it today you would earn a total of 5,337 from holding GMS Inc or generate 110.43% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
GMS Inc vs. JBG SMITH Properties
Performance |
| Timeline |
| GMS Inc |
| JBG SMITH Properties |
GMS and JBG SMITH Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with GMS and JBG SMITH
The main advantage of trading using opposite GMS and JBG SMITH positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if GMS position performs unexpectedly, JBG SMITH 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 JBG SMITH will offset losses from the drop in JBG SMITH's long position.| GMS vs. Quanex Building Products | GMS vs. Apogee Enterprises | GMS vs. Azek Company | GMS vs. Beacon Roofing Supply |
| JBG SMITH vs. Cousins Properties Incorporated | JBG SMITH vs. Highwoods Properties | JBG SMITH vs. Douglas Emmett | JBG SMITH vs. Equity Commonwealth |
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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.
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