Correlation Between GMS and Jeld Wen
Can any of the company-specific risk be diversified away by investing in both GMS and Jeld Wen 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 Jeld Wen into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between GMS Inc and Jeld Wen Holding, you can compare the effects of market volatilities on GMS and Jeld Wen 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 Jeld Wen. Check out your portfolio center. Please also check ongoing floating volatility patterns of GMS and Jeld Wen.
Diversification Opportunities for GMS and Jeld Wen
Excellent diversification
The 3 months correlation between GMS and Jeld is -0.54. Overlapping area represents the amount of risk that can be diversified away by holding GMS Inc and Jeld Wen Holding in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Jeld Wen Holding 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 Jeld Wen. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Jeld Wen Holding has no effect on the direction of GMS i.e., GMS and Jeld Wen go up and down completely randomly.
Pair Corralation between GMS and Jeld Wen
Considering the 90-day investment horizon GMS Inc is expected to generate 0.31 times more return on investment than Jeld Wen. However, GMS Inc is 3.22 times less risky than Jeld Wen. It trades about 0.2 of its potential returns per unit of risk. Jeld Wen Holding is currently generating about -0.12 per unit of risk. If you would invest 8,842 in GMS Inc on August 26, 2024 and sell it today you would earn a total of 1,328 from holding GMS Inc or generate 15.02% 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. Jeld Wen Holding
Performance |
| Timeline |
| GMS Inc |
| Jeld Wen Holding |
GMS and Jeld Wen Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with GMS and Jeld Wen
The main advantage of trading using opposite GMS and Jeld Wen positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if GMS position performs unexpectedly, Jeld Wen 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 Jeld Wen will offset losses from the drop in Jeld Wen's long position.| GMS vs. Quanex Building Products | GMS vs. Apogee Enterprises | GMS vs. Azek Company | GMS vs. Beacon Roofing Supply |
| Jeld Wen vs. Trex Company | Jeld Wen vs. Gibraltar Industries | Jeld Wen vs. Travis Perkins PLC | Jeld Wen vs. Janus International Group |
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 Financial Widgets module to easily integrated Macroaxis content with over 30 different plug-and-play financial widgets.
Other Complementary Tools
| Portfolio Rebalancing Analyze risk-adjusted returns against different time horizons to find asset-allocation targets | |
| ETF Categories List of ETF categories grouped based on various criteria, such as the investment strategy or type of investments | |
| Idea Breakdown Analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes | |
| FinTech Suite Use AI to screen and filter profitable investment opportunities | |
| Analyst Advice Analyst recommendations and target price estimates broken down by several categories |