Correlation Between Melexis NV and GMS
Can any of the company-specific risk be diversified away by investing in both Melexis NV 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 Melexis NV and GMS into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Melexis NV and GMS Inc, you can compare the effects of market volatilities on Melexis NV 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 Melexis NV with a short position of GMS. Check out your portfolio center. Please also check ongoing floating volatility patterns of Melexis NV and GMS.
Diversification Opportunities for Melexis NV and GMS
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Melexis and GMS is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Melexis NV and GMS Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on GMS Inc and Melexis NV 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 Melexis NV 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 Melexis NV i.e., Melexis NV and GMS go up and down completely randomly.
Pair Corralation between Melexis NV and GMS
Assuming the 90 days horizon Melexis NV is expected to under-perform the GMS. In addition to that, Melexis NV is 1.13 times more volatile than GMS Inc. It trades about -0.06 of its total potential returns per unit of risk. GMS Inc is currently generating about 0.0 per unit of volatility. If you would invest 8,664 in GMS Inc on November 3, 2024 and sell it today you would lose (230.00) from holding GMS Inc or give up 2.65% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Melexis NV vs. GMS Inc
Performance |
| Timeline |
| Melexis NV |
| GMS Inc |
Melexis NV and GMS Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Melexis NV and GMS
The main advantage of trading using opposite Melexis NV and GMS positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Melexis NV 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.| Melexis NV vs. ams AG | Melexis NV vs. Odyssey Semiconductor Technologies | Melexis NV vs. Archer Materials Limited | Melexis NV vs. Alphawave IP Group |
| 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 Bonds Directory module to find actively traded corporate debentures issued by US companies.
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