Correlation Between PETROLEOS and GMS
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By analyzing existing cross correlation between PETROLEOS MEXICANOS 95 and GMS Inc, you can compare the effects of market volatilities on PETROLEOS 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 PETROLEOS with a short position of GMS. Check out your portfolio center. Please also check ongoing floating volatility patterns of PETROLEOS and GMS.
Diversification Opportunities for PETROLEOS and GMS
Weak diversification
The 3 months correlation between PETROLEOS and GMS is 0.33. Overlapping area represents the amount of risk that can be diversified away by holding PETROLEOS MEXICANOS 95 and GMS Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on GMS Inc and PETROLEOS 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 PETROLEOS MEXICANOS 95 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 PETROLEOS i.e., PETROLEOS and GMS go up and down completely randomly.
Pair Corralation between PETROLEOS and GMS
Assuming the 90 days trading horizon PETROLEOS MEXICANOS 95 is expected to under-perform the GMS. In addition to that, PETROLEOS is 2.43 times more volatile than GMS Inc. It trades about -0.28 of its total potential returns per unit of risk. GMS Inc is currently generating about 0.23 per unit of volatility. If you would invest 9,127 in GMS Inc on August 31, 2024 and sell it today you would earn a total of 908.00 from holding GMS Inc or generate 9.95% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 21.74% |
| Values | Daily Returns |
PETROLEOS MEXICANOS 95 vs. GMS Inc
Performance |
| Timeline |
| PETROLEOS MEXICANOS |
| GMS Inc |
PETROLEOS and GMS Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with PETROLEOS and GMS
The main advantage of trading using opposite PETROLEOS and GMS positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if PETROLEOS 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.| PETROLEOS vs. Iridium Communications | PETROLEOS vs. Amkor Technology | PETROLEOS vs. GMS Inc | PETROLEOS vs. Flexible Solutions International |
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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 Portfolio Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.
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