Correlation Between GMS and ContraFect

Can any of the company-specific risk be diversified away by investing in both GMS and ContraFect 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 ContraFect into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between GMS Inc and ContraFect, you can compare the effects of market volatilities on GMS and ContraFect 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 ContraFect. Check out your portfolio center. Please also check ongoing floating volatility patterns of GMS and ContraFect.

Diversification Opportunities for GMS and ContraFect

0.0

Correlation Coefficient

GMS  ContraFect

Pay attention - limited upside

The 3 months correlation between GMS and ContraFect is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding GMS Inc and ContraFect in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ContraFect 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 ContraFect. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ContraFect has no effect on the direction of GMS i.e., GMS and ContraFect go up and down completely randomly.

Pair Corralation between GMS and ContraFect

If you would invest  7,328  in GMS Inc on May 1, 2025 and sell it today you would earn a total of  3,632  from holding GMS Inc or generate 49.56% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	0.0%
Values	Daily Returns

GMS Inc  vs.  ContraFect

GMS Inc

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in GMS Inc are ranked lower than 14 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively inconsistent primary indicators, GMS unveiled solid returns over the last few months and may actually be approaching a breakup point.

ContraFect

Risk-Adjusted Performance

Very Weak

Over the last 90 days ContraFect has generated negative risk-adjusted returns adding no value to investors with long positions. Even with relatively invariable basic indicators, ContraFect is not utilizing all of its potentials. The current stock price agitation, may contribute to short-term losses for the retail investors.

Pair Trading with GMS and ContraFect

The main advantage of trading using opposite GMS and ContraFect positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if GMS position performs unexpectedly, ContraFect 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 ContraFect will offset losses from the drop in ContraFect's long position.

The idea behind GMS Inc and ContraFect pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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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 Fundamentals Comparison module to compare fundamentals across multiple equities to find investing opportunities.