Correlation Between GMS and Praxsyn Corp
Can any of the company-specific risk be diversified away by investing in both GMS and Praxsyn Corp 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 Praxsyn Corp into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between GMS Inc and Praxsyn Corp, you can compare the effects of market volatilities on GMS and Praxsyn Corp 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 Praxsyn Corp. Check out your portfolio center. Please also check ongoing floating volatility patterns of GMS and Praxsyn Corp.
Diversification Opportunities for GMS and Praxsyn Corp
0.39 | Correlation Coefficient |
Weak diversification
The 3 months correlation between GMS and Praxsyn is 0.39. Overlapping area represents the amount of risk that can be diversified away by holding GMS Inc and Praxsyn Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Praxsyn Corp 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 Praxsyn Corp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Praxsyn Corp has no effect on the direction of GMS i.e., GMS and Praxsyn Corp go up and down completely randomly.
Pair Corralation between GMS and Praxsyn Corp
Considering the 90-day investment horizon GMS is expected to generate 122.07 times less return on investment than Praxsyn Corp. But when comparing it to its historical volatility, GMS Inc is 48.58 times less risky than Praxsyn Corp. It trades about 0.03 of its potential returns per unit of risk. Praxsyn Corp is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest 0.00 in Praxsyn Corp on September 14, 2024 and sell it today you would earn a total of 0.00 from holding Praxsyn Corp or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 51.41% |
| Values | Daily Returns |
GMS Inc vs. Praxsyn Corp
Performance |
| Timeline |
| GMS Inc |
| Praxsyn Corp |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
GMS and Praxsyn Corp Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with GMS and Praxsyn Corp
The main advantage of trading using opposite GMS and Praxsyn Corp positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if GMS position performs unexpectedly, Praxsyn Corp 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 Praxsyn Corp will offset losses from the drop in Praxsyn Corp's long position.| GMS vs. Quanex Building Products | GMS vs. Apogee Enterprises | GMS vs. Azek Company | GMS vs. Beacon Roofing Supply |
| Praxsyn Corp vs. Artisan Partners Asset | Praxsyn Corp vs. Siriuspoint | Praxsyn Corp vs. Skechers USA | Praxsyn Corp vs. Lincoln Electric Holdings |
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 Stocks Directory module to find actively traded stocks across global markets.
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