Correlation Between GCM Grosvenor and Dow Jones
Can any of the company-specific risk be diversified away by investing in both GCM Grosvenor and Dow Jones 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 GCM Grosvenor and Dow Jones into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between GCM Grosvenor and Dow Jones Industrial, you can compare the effects of market volatilities on GCM Grosvenor and Dow Jones 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 GCM Grosvenor with a short position of Dow Jones. Check out your portfolio center. Please also check ongoing floating volatility patterns of GCM Grosvenor and Dow Jones.
Diversification Opportunities for GCM Grosvenor and Dow Jones
0.83 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between GCM and Dow is 0.83. Overlapping area represents the amount of risk that can be diversified away by holding GCM Grosvenor and Dow Jones Industrial in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Dow Jones Industrial and GCM Grosvenor 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 GCM Grosvenor are associated (or correlated) with Dow Jones. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Dow Jones Industrial has no effect on the direction of GCM Grosvenor i.e., GCM Grosvenor and Dow Jones go up and down completely randomly.
Pair Corralation between GCM Grosvenor and Dow Jones
Given the investment horizon of 90 days GCM Grosvenor is expected to generate 2.07 times more return on investment than Dow Jones. However, GCM Grosvenor is 2.07 times more volatile than Dow Jones Industrial. It trades about 0.07 of its potential returns per unit of risk. Dow Jones Industrial is currently generating about 0.08 per unit of risk. If you would invest 796.00 in GCM Grosvenor on August 25, 2024 and sell it today you would earn a total of 437.00 from holding GCM Grosvenor or generate 54.9% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
GCM Grosvenor vs. Dow Jones Industrial
Performance |
| Timeline |
GCM Grosvenor and Dow Jones Volatility Contrast
Predicted Return Density |
| Returns |
GCM Grosvenor
Pair trading matchups for GCM Grosvenor
Dow Jones Industrial
Pair trading matchups for Dow Jones
Pair Trading with GCM Grosvenor and Dow Jones
The main advantage of trading using opposite GCM Grosvenor and Dow Jones positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if GCM Grosvenor position performs unexpectedly, Dow Jones 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 Dow Jones will offset losses from the drop in Dow Jones' long position.| GCM Grosvenor vs. MFS Investment Grade | GCM Grosvenor vs. Invesco High Income | GCM Grosvenor vs. Eaton Vance National | GCM Grosvenor vs. Nuveen California Select |
| Dow Jones vs. Vistra Energy Corp | Dow Jones vs. Fluence Energy | Dow Jones vs. Old Republic International | Dow Jones vs. Empresa Distribuidora y |
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 Sectors module to list of equity sectors categorizing publicly traded companies based on their primary business activities.
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