Correlation Between GMS and DGELN
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By analyzing existing cross correlation between GMS Inc and DGELN 52 24 OCT 25, you can compare the effects of market volatilities on GMS and DGELN 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 DGELN. Check out your portfolio center. Please also check ongoing floating volatility patterns of GMS and DGELN.
Diversification Opportunities for GMS and DGELN
Good diversification
The 3 months correlation between GMS and DGELN is -0.17. Overlapping area represents the amount of risk that can be diversified away by holding GMS Inc and DGELN 52 24 OCT 25 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on DGELN 52 24 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 DGELN. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of DGELN 52 24 has no effect on the direction of GMS i.e., GMS and DGELN go up and down completely randomly.
Pair Corralation between GMS and DGELN
Considering the 90-day investment horizon GMS Inc is expected to generate 6.5 times more return on investment than DGELN. However, GMS is 6.5 times more volatile than DGELN 52 24 OCT 25. It trades about 0.07 of its potential returns per unit of risk. DGELN 52 24 OCT 25 is currently generating about 0.01 per unit of risk. If you would invest 5,070 in GMS Inc on September 14, 2024 and sell it today you would earn a total of 4,022 from holding GMS Inc or generate 79.32% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 68.89% |
| Values | Daily Returns |
GMS Inc vs. DGELN 52 24 OCT 25
Performance |
| Timeline |
| GMS Inc |
| DGELN 52 24 |
GMS and DGELN Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with GMS and DGELN
The main advantage of trading using opposite GMS and DGELN positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if GMS position performs unexpectedly, DGELN 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 DGELN will offset losses from the drop in DGELN's long position.| GMS vs. Quanex Building Products | GMS vs. Apogee Enterprises | GMS vs. Azek Company | GMS vs. Beacon Roofing Supply |
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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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