Correlation Between GMS and Janus International

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

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

Diversification Opportunities for GMS and Janus International

0.68

Correlation Coefficient

GMS  Janus International

Poor diversification

The 3 months correlation between GMS and Janus is 0.68. Overlapping area represents the amount of risk that can be diversified away by holding GMS Inc and Janus International Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Janus International 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 Janus International. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Janus International has no effect on the direction of GMS i.e., GMS and Janus International go up and down completely randomly.

Pair Corralation between GMS and Janus International

Considering the 90-day investment horizon GMS Inc is expected to generate 1.43 times more return on investment than Janus International. However, GMS is 1.43 times more volatile than Janus International Group. It trades about 0.18 of its potential returns per unit of risk. Janus International Group is currently generating about 0.11 per unit of risk. If you would invest  7,412  in GMS Inc on May 4, 2025 and sell it today you would earn a total of  3,549  from holding GMS Inc or generate 47.88% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	98.41%
Values	Daily Returns

GMS Inc  vs.  Janus International Group

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.

Janus International

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Janus International Group are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. Despite fairly conflicting fundamental drivers, Janus International demonstrated solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with GMS and Janus International

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

The idea behind GMS Inc and Janus International Group 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 Correlation Analysis module to reduce portfolio risk simply by holding instruments which are not perfectly correlated.