Correlation Between GMS and CARPENTER
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By analyzing existing cross correlation between GMS Inc and CARPENTER TECHNOLOGY P, you can compare the effects of market volatilities on GMS and CARPENTER 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 CARPENTER. Check out your portfolio center. Please also check ongoing floating volatility patterns of GMS and CARPENTER.
Diversification Opportunities for GMS and CARPENTER
Good diversification
The 3 months correlation between GMS and CARPENTER is -0.13. Overlapping area represents the amount of risk that can be diversified away by holding GMS Inc and CARPENTER TECHNOLOGY P in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CARPENTER TECHNOLOGY 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 CARPENTER. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CARPENTER TECHNOLOGY has no effect on the direction of GMS i.e., GMS and CARPENTER go up and down completely randomly.
Pair Corralation between GMS and CARPENTER
Considering the 90-day investment horizon GMS Inc is expected to generate 3.83 times more return on investment than CARPENTER. However, GMS is 3.83 times more volatile than CARPENTER TECHNOLOGY P. It trades about 0.23 of its potential returns per unit of risk. CARPENTER TECHNOLOGY P is currently generating about -0.03 per unit of risk. If you would invest 9,161 in GMS Inc on September 4, 2024 and sell it today you would earn a total of 852.00 from holding GMS Inc or generate 9.3% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 90.48% |
| Values | Daily Returns |
GMS Inc vs. CARPENTER TECHNOLOGY P
Performance |
| Timeline |
| GMS Inc |
| CARPENTER TECHNOLOGY |
GMS and CARPENTER Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with GMS and CARPENTER
The main advantage of trading using opposite GMS and CARPENTER positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if GMS position performs unexpectedly, CARPENTER 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 CARPENTER will offset losses from the drop in CARPENTER's long position.| GMS vs. Quanex Building Products | GMS vs. Apogee Enterprises | GMS vs. Azek Company | GMS vs. Beacon Roofing Supply |
| CARPENTER vs. Newpark Resources | CARPENTER vs. Emerson Radio | CARPENTER vs. Dave Busters Entertainment | CARPENTER vs. RBC Bearings Incorporated |
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 Latest Portfolios module to quick portfolio dashboard that showcases your latest portfolios.
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