Correlation Between GMS and Juniata Valley
Can any of the company-specific risk be diversified away by investing in both GMS and Juniata Valley 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 Juniata Valley into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between GMS Inc and Juniata Valley Financial, you can compare the effects of market volatilities on GMS and Juniata Valley 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 Juniata Valley. Check out your portfolio center. Please also check ongoing floating volatility patterns of GMS and Juniata Valley.
Diversification Opportunities for GMS and Juniata Valley
0.22 | Correlation Coefficient |
Modest diversification
The 3 months correlation between GMS and Juniata is 0.22. Overlapping area represents the amount of risk that can be diversified away by holding GMS Inc and Juniata Valley Financial in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Juniata Valley Financial 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 Juniata Valley. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Juniata Valley Financial has no effect on the direction of GMS i.e., GMS and Juniata Valley go up and down completely randomly.
Pair Corralation between GMS and Juniata Valley
Considering the 90-day investment horizon GMS Inc is expected to generate 0.99 times more return on investment than Juniata Valley. However, GMS Inc is 1.01 times less risky than Juniata Valley. It trades about 0.23 of its potential returns per unit of risk. Juniata Valley Financial is currently generating about 0.14 per unit of risk. If you would invest 9,127 in GMS Inc on August 31, 2024 and sell it today you would earn a total of 895.00 from holding GMS Inc or generate 9.81% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
GMS Inc vs. Juniata Valley Financial
Performance |
| Timeline |
| GMS Inc |
| Juniata Valley Financial |
GMS and Juniata Valley Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with GMS and Juniata Valley
The main advantage of trading using opposite GMS and Juniata Valley positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if GMS position performs unexpectedly, Juniata Valley 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 Juniata Valley will offset losses from the drop in Juniata Valley's long position.| GMS vs. Quanex Building Products | GMS vs. Apogee Enterprises | GMS vs. Azek Company | GMS vs. Beacon Roofing Supply |
| Juniata Valley vs. FNB Inc | Juniata Valley vs. Apollo Bancorp | Juniata Valley vs. Commercial National Financial | Juniata Valley vs. Eastern Michigan Financial |
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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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