Correlation Between Getty Realty and GMS
Can any of the company-specific risk be diversified away by investing in both Getty Realty and GMS 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 Getty Realty and GMS into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Getty Realty and GMS Inc, you can compare the effects of market volatilities on Getty Realty and GMS 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 Getty Realty with a short position of GMS. Check out your portfolio center. Please also check ongoing floating volatility patterns of Getty Realty and GMS.
Diversification Opportunities for Getty Realty and GMS
0.81 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Getty and GMS is 0.81. Overlapping area represents the amount of risk that can be diversified away by holding Getty Realty and GMS Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on GMS Inc and Getty Realty 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 Getty Realty are associated (or correlated) with GMS. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of GMS Inc has no effect on the direction of Getty Realty i.e., Getty Realty and GMS go up and down completely randomly.
Pair Corralation between Getty Realty and GMS
Considering the 90-day investment horizon Getty Realty is expected to generate 11.89 times less return on investment than GMS. But when comparing it to its historical volatility, Getty Realty is 1.45 times less risky than GMS. It trades about 0.01 of its potential returns per unit of risk. GMS Inc is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest 5,366 in GMS Inc on November 28, 2024 and sell it today you would earn a total of 2,654 from holding GMS Inc or generate 49.46% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Getty Realty vs. GMS Inc
Performance |
| Timeline |
| Getty Realty |
| GMS Inc |
Getty Realty and GMS Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Getty Realty and GMS
The main advantage of trading using opposite Getty Realty and GMS positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Getty Realty position performs unexpectedly, GMS 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 GMS will offset losses from the drop in GMS's long position.| Getty Realty vs. Regency Centers | Getty Realty vs. Site Centers Corp | Getty Realty vs. Brixmor Property | Getty Realty vs. Tanger Factory Outlet |
| GMS vs. Quanex Building Products | GMS vs. Apogee Enterprises | GMS vs. Azek Company | GMS vs. Beacon Roofing Supply |
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 CEOs Directory module to screen CEOs from public companies around the world.
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