Correlation Between Bny Mellon and GCM Grosvenor
Can any of the company-specific risk be diversified away by investing in both Bny Mellon 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 Bny Mellon and GCM Grosvenor into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Bny Mellon Municipalome and GCM Grosvenor, you can compare the effects of market volatilities on Bny Mellon 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 Bny Mellon with a short position of GCM Grosvenor. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bny Mellon and GCM Grosvenor.
Diversification Opportunities for Bny Mellon and GCM Grosvenor
-0.3 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Bny and GCM is -0.3. Overlapping area represents the amount of risk that can be diversified away by holding Bny Mellon Municipalome and GCM Grosvenor in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on GCM Grosvenor and Bny Mellon 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 Bny Mellon Municipalome 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 Bny Mellon i.e., Bny Mellon and GCM Grosvenor go up and down completely randomly.
Pair Corralation between Bny Mellon and GCM Grosvenor
Considering the 90-day investment horizon Bny Mellon is expected to generate 17.03 times less return on investment than GCM Grosvenor. But when comparing it to its historical volatility, Bny Mellon Municipalome is 10.26 times less risky than GCM Grosvenor. It trades about 0.11 of its potential returns per unit of risk. GCM Grosvenor is currently generating about 0.18 of returns per unit of risk over similar time horizon. If you would invest 100.00 in GCM Grosvenor on August 29, 2024 and sell it today you would earn a total of 29.00 from holding GCM Grosvenor or generate 29.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 95.45% |
| Values | Daily Returns |
Bny Mellon Municipalome vs. GCM Grosvenor
Performance |
| Timeline |
| Bny Mellon Municipalome |
| GCM Grosvenor |
Bny Mellon and GCM Grosvenor Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bny Mellon and GCM Grosvenor
The main advantage of trading using opposite Bny Mellon and GCM Grosvenor positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bny Mellon 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.| Bny Mellon vs. Blackrock Muniyield | Bny Mellon vs. Blackrock Muni Intermediate | Bny Mellon vs. Blackrock Muniyield Quality | Bny Mellon vs. Blackrock Muniyield Quality |
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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 Cryptocurrency Center module to build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency.
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