Correlation Between GMS and FitLife Brands,

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

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

Diversification Opportunities for GMS and FitLife Brands,

-0.1

Correlation Coefficient

GMS  FitLife Brands,

Good diversification

The 3 months correlation between GMS and FitLife is -0.1. Overlapping area represents the amount of risk that can be diversified away by holding GMS Inc and FitLife Brands, Common in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on FitLife Brands, Common 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 FitLife Brands,. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of FitLife Brands, Common has no effect on the direction of GMS i.e., GMS and FitLife Brands, go up and down completely randomly.

Pair Corralation between GMS and FitLife Brands,

Considering the 90-day investment horizon GMS Inc is expected to under-perform the FitLife Brands,. In addition to that, GMS is 1.45 times more volatile than FitLife Brands, Common. It trades about -0.06 of its total potential returns per unit of risk. FitLife Brands, Common is currently generating about -0.01 per unit of volatility. If you would invest  3,289  in FitLife Brands, Common on July 26, 2024 and sell it today you would lose (33.00) from holding FitLife Brands, Common or give up 1.0% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	97.67%
Values	Daily Returns

GMS Inc  vs.  FitLife Brands, Common

GMS Inc

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days GMS Inc has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable primary indicators, GMS is not utilizing all of its potentials. The current stock price uproar, may contribute to short-horizon losses for the private investors.

FitLife Brands, Common

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days FitLife Brands, Common has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable essential indicators, FitLife Brands, is not utilizing all of its potentials. The newest stock price disturbance, may contribute to mid-run losses for the stockholders.

Pair Trading with GMS and FitLife Brands,

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

The idea behind GMS Inc and FitLife Brands, Common 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.

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 Equity Forecasting module to use basic forecasting models to generate price predictions and determine price momentum.