Correlation Between Associated Capital and GCM Grosvenor
Can any of the company-specific risk be diversified away by investing in both Associated Capital and GCM Grosvenor 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 Associated Capital and GCM Grosvenor into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Associated Capital Group and GCM Grosvenor, you can compare the effects of market volatilities on Associated Capital and GCM Grosvenor 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 Associated Capital with a short position of GCM Grosvenor. Check out your portfolio center. Please also check ongoing floating volatility patterns of Associated Capital and GCM Grosvenor.
Diversification Opportunities for Associated Capital and GCM Grosvenor
0.65 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Associated and GCM is 0.65. Overlapping area represents the amount of risk that can be diversified away by holding Associated Capital Group and GCM Grosvenor in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on GCM Grosvenor and Associated Capital 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 Associated Capital Group are associated (or correlated) with GCM Grosvenor. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of GCM Grosvenor has no effect on the direction of Associated Capital i.e., Associated Capital and GCM Grosvenor go up and down completely randomly.
Pair Corralation between Associated Capital and GCM Grosvenor
Allowing for the 90-day total investment horizon Associated Capital is expected to generate 11.38 times less return on investment than GCM Grosvenor. But when comparing it to its historical volatility, Associated Capital Group is 5.21 times less risky than GCM Grosvenor. It trades about 0.04 of its potential returns per unit of risk. GCM Grosvenor is currently generating about 0.09 of returns per unit of risk over similar time horizon. If you would invest 55.00 in GCM Grosvenor on November 28, 2024 and sell it today you would earn a total of 187.00 from holding GCM Grosvenor or generate 340.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 83.3% |
| Values | Daily Returns |
Associated Capital Group vs. GCM Grosvenor
Performance |
| Timeline |
| Associated Capital |
| GCM Grosvenor |
Associated Capital and GCM Grosvenor Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Associated Capital and GCM Grosvenor
The main advantage of trading using opposite Associated Capital and GCM Grosvenor positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Associated Capital position performs unexpectedly, GCM Grosvenor 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 GCM Grosvenor will offset losses from the drop in GCM Grosvenor's long position.| Associated Capital vs. Abrdn Emerging Markets | Associated Capital vs. DWS Municipal Income | Associated Capital vs. Blackrock Muni Intermediate | Associated Capital vs. Blackrock Muniyield |
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 Analyst Advice module to analyst recommendations and target price estimates broken down by several categories.
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