Correlation Between MFS High and GCM Grosvenor
Can any of the company-specific risk be diversified away by investing in both MFS High 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 MFS High and GCM Grosvenor into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between MFS High Yield and GCM Grosvenor, you can compare the effects of market volatilities on MFS High 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 MFS High with a short position of GCM Grosvenor. Check out your portfolio center. Please also check ongoing floating volatility patterns of MFS High and GCM Grosvenor.
Diversification Opportunities for MFS High and GCM Grosvenor
-0.01 | Correlation Coefficient |
Good diversification
The 3 months correlation between MFS and GCM is -0.01. Overlapping area represents the amount of risk that can be diversified away by holding MFS High Yield and GCM Grosvenor in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on GCM Grosvenor and MFS High 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 MFS High Yield 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 MFS High i.e., MFS High and GCM Grosvenor go up and down completely randomly.
Pair Corralation between MFS High and GCM Grosvenor
Considering the 90-day investment horizon MFS High is expected to generate 3.92 times less return on investment than GCM Grosvenor. But when comparing it to its historical volatility, MFS High Yield is 2.71 times less risky than GCM Grosvenor. It trades about 0.09 of its potential returns per unit of risk. GCM Grosvenor is currently generating about 0.14 of returns per unit of risk over similar time horizon. If you would invest 1,171 in GCM Grosvenor on August 28, 2024 and sell it today you would earn a total of 64.00 from holding GCM Grosvenor or generate 5.47% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
MFS High Yield vs. GCM Grosvenor
Performance |
| Timeline |
| MFS High Yield |
| GCM Grosvenor |
MFS High and GCM Grosvenor Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with MFS High and GCM Grosvenor
The main advantage of trading using opposite MFS High and GCM Grosvenor positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if MFS High 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.| MFS High vs. Aurora Innovation | MFS High vs. HUMANA INC | MFS High vs. Aquagold International | MFS High vs. Barloworld Ltd ADR |
| GCM Grosvenor vs. Aurora Innovation | GCM Grosvenor vs. HUMANA INC | GCM Grosvenor vs. Aquagold International | GCM Grosvenor vs. Barloworld Ltd ADR |
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 Efficient Frontier module to plot and analyze your portfolio and positions against risk-return landscape of the market..
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