Correlation Between GMS and Ryman Hospitality
Can any of the company-specific risk be diversified away by investing in both GMS and Ryman Hospitality 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 Ryman Hospitality into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between GMS Inc and Ryman Hospitality Properties, you can compare the effects of market volatilities on GMS and Ryman Hospitality 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 Ryman Hospitality. Check out your portfolio center. Please also check ongoing floating volatility patterns of GMS and Ryman Hospitality.
Diversification Opportunities for GMS and Ryman Hospitality
0.85 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between GMS and Ryman is 0.85. Overlapping area represents the amount of risk that can be diversified away by holding GMS Inc and Ryman Hospitality Properties in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ryman Hospitality 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 Ryman Hospitality. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ryman Hospitality has no effect on the direction of GMS i.e., GMS and Ryman Hospitality go up and down completely randomly.
Pair Corralation between GMS and Ryman Hospitality
Considering the 90-day investment horizon GMS Inc is expected to generate 1.34 times more return on investment than Ryman Hospitality. However, GMS is 1.34 times more volatile than Ryman Hospitality Properties. It trades about 0.05 of its potential returns per unit of risk. Ryman Hospitality Properties is currently generating about 0.04 per unit of risk. If you would invest 8,073 in GMS Inc on September 12, 2024 and sell it today you would earn a total of 1,427 from holding GMS Inc or generate 17.68% 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. Ryman Hospitality Properties
Performance |
| Timeline |
| GMS Inc |
| Ryman Hospitality |
GMS and Ryman Hospitality Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with GMS and Ryman Hospitality
The main advantage of trading using opposite GMS and Ryman Hospitality positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if GMS position performs unexpectedly, Ryman Hospitality 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 Ryman Hospitality will offset losses from the drop in Ryman Hospitality's long position.| GMS vs. Quanex Building Products | GMS vs. Apogee Enterprises | GMS vs. Azek Company | GMS vs. Beacon Roofing Supply |
| Ryman Hospitality vs. RLJ Lodging Trust | Ryman Hospitality vs. Pebblebrook Hotel Trust | Ryman Hospitality vs. Xenia Hotels Resorts | Ryman Hospitality vs. Sunstone Hotel Investors |
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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