Correlation Between GMS and SunLink Health
Can any of the company-specific risk be diversified away by investing in both GMS and SunLink Health 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 SunLink Health into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between GMS Inc and SunLink Health Systems, you can compare the effects of market volatilities on GMS and SunLink Health 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 SunLink Health. Check out your portfolio center. Please also check ongoing floating volatility patterns of GMS and SunLink Health.
Diversification Opportunities for GMS and SunLink Health
-0.02 | Correlation Coefficient |
Good diversification
The 3 months correlation between GMS and SunLink is -0.02. Overlapping area represents the amount of risk that can be diversified away by holding GMS Inc and SunLink Health Systems in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SunLink Health Systems 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 SunLink Health. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SunLink Health Systems has no effect on the direction of GMS i.e., GMS and SunLink Health go up and down completely randomly.
Pair Corralation between GMS and SunLink Health
Considering the 90-day investment horizon GMS Inc is expected to generate 0.44 times more return on investment than SunLink Health. However, GMS Inc is 2.25 times less risky than SunLink Health. It trades about 0.08 of its potential returns per unit of risk. SunLink Health Systems is currently generating about 0.02 per unit of risk. If you would invest 5,375 in GMS Inc on August 30, 2024 and sell it today you would earn a total of 4,647 from holding GMS Inc or generate 86.46% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
GMS Inc vs. SunLink Health Systems
Performance |
| Timeline |
| GMS Inc |
| SunLink Health Systems |
GMS and SunLink Health Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with GMS and SunLink Health
The main advantage of trading using opposite GMS and SunLink Health positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if GMS position performs unexpectedly, SunLink Health 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 SunLink Health will offset losses from the drop in SunLink Health's long position.| GMS vs. Quanex Building Products | GMS vs. Apogee Enterprises | GMS vs. Azek Company | GMS vs. Beacon Roofing Supply |
| SunLink Health vs. Leafly Holdings | SunLink Health vs. Allstar Health Brands | SunLink Health vs. Leafly Holdings | SunLink Health vs. Kiaro Holdings Corp |
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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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