Correlation Between GMS and Valneva SE
Can any of the company-specific risk be diversified away by investing in both GMS and Valneva SE 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 Valneva SE into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between GMS Inc and Valneva SE ADR, you can compare the effects of market volatilities on GMS and Valneva SE 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 Valneva SE. Check out your portfolio center. Please also check ongoing floating volatility patterns of GMS and Valneva SE.
Diversification Opportunities for GMS and Valneva SE
-0.69 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between GMS and Valneva is -0.69. Overlapping area represents the amount of risk that can be diversified away by holding GMS Inc and Valneva SE ADR in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Valneva SE ADR 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 Valneva SE. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Valneva SE ADR has no effect on the direction of GMS i.e., GMS and Valneva SE go up and down completely randomly.
Pair Corralation between GMS and Valneva SE
Considering the 90-day investment horizon GMS Inc is expected to generate 0.66 times more return on investment than Valneva SE. However, GMS Inc is 1.52 times less risky than Valneva SE. It trades about 0.31 of its potential returns per unit of risk. Valneva SE ADR is currently generating about -0.46 per unit of risk. If you would invest 8,989 in GMS Inc on August 26, 2024 and sell it today you would earn a total of 1,181 from holding GMS Inc or generate 13.14% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
GMS Inc vs. Valneva SE ADR
Performance |
| Timeline |
| GMS Inc |
| Valneva SE ADR |
GMS and Valneva SE Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with GMS and Valneva SE
The main advantage of trading using opposite GMS and Valneva SE positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if GMS position performs unexpectedly, Valneva SE 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 Valneva SE will offset losses from the drop in Valneva SE's long position.| GMS vs. Quanex Building Products | GMS vs. Apogee Enterprises | GMS vs. Azek Company | GMS vs. Beacon Roofing Supply |
| Valneva SE vs. Eliem Therapeutics | Valneva SE vs. HCW Biologics | Valneva SE vs. Scpharmaceuticals | Valneva SE vs. Milestone Pharmaceuticals |
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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.
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