Correlation Between GMS and BitFuFu

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

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

Diversification Opportunities for GMS and BitFuFu

0.52

Correlation Coefficient

GMS  BitFuFu

Very weak diversification

The 3 months correlation between GMS and BitFuFu is 0.52. Overlapping area represents the amount of risk that can be diversified away by holding GMS Inc and BitFuFu Class A in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BitFuFu Class A 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 BitFuFu. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of BitFuFu Class A has no effect on the direction of GMS i.e., GMS and BitFuFu go up and down completely randomly.

Pair Corralation between GMS and BitFuFu

Considering the 90-day investment horizon GMS is expected to generate 11.3 times less return on investment than BitFuFu. But when comparing it to its historical volatility, GMS Inc is 25.56 times less risky than BitFuFu. It trades about 0.14 of its potential returns per unit of risk. BitFuFu Class A is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest  326.00  in BitFuFu Class A on July 1, 2025 and sell it today you would earn a total of  39.00  from holding BitFuFu Class A or generate 11.96% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	76.19%
Values	Daily Returns

GMS Inc  vs.  BitFuFu Class A

GMS Inc

Risk-Adjusted Performance

Good

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 recent stock price uproar, may contribute to short-horizon losses for the private investors.

BitFuFu Class A

Risk-Adjusted Performance

Mild

Compared to the overall equity markets, risk-adjusted returns on investments in BitFuFu Class A are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively unfluctuating technical and fundamental indicators, BitFuFu unveiled solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with GMS and BitFuFu

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

The idea behind GMS Inc and BitFuFu Class A 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 Alpha Finder module to use alpha and beta coefficients to find investment opportunities after accounting for the risk.