Correlation Between GCM Grosvenor and Landsea Homes
Can any of the company-specific risk be diversified away by investing in both GCM Grosvenor and Landsea Homes 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 Landsea Homes into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between GCM Grosvenor and Landsea Homes Corp, you can compare the effects of market volatilities on GCM Grosvenor and Landsea Homes 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 Landsea Homes. Check out your portfolio center. Please also check ongoing floating volatility patterns of GCM Grosvenor and Landsea Homes.
Diversification Opportunities for GCM Grosvenor and Landsea Homes
-0.58 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between GCM and Landsea is -0.58. Overlapping area represents the amount of risk that can be diversified away by holding GCM Grosvenor and Landsea Homes Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Landsea Homes Corp 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 Landsea Homes. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Landsea Homes Corp has no effect on the direction of GCM Grosvenor i.e., GCM Grosvenor and Landsea Homes go up and down completely randomly.
Pair Corralation between GCM Grosvenor and Landsea Homes
Given the investment horizon of 90 days GCM Grosvenor is expected to generate 0.36 times more return on investment than Landsea Homes. However, GCM Grosvenor is 2.8 times less risky than Landsea Homes. It trades about 0.42 of its potential returns per unit of risk. Landsea Homes Corp is currently generating about 0.02 per unit of risk. If you would invest 1,249 in GCM Grosvenor on November 3, 2024 and sell it today you would earn a total of 103.00 from holding GCM Grosvenor or generate 8.25% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
GCM Grosvenor vs. Landsea Homes Corp
Performance |
| Timeline |
| GCM Grosvenor |
| Landsea Homes Corp |
GCM Grosvenor and Landsea Homes Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with GCM Grosvenor and Landsea Homes
The main advantage of trading using opposite GCM Grosvenor and Landsea Homes positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if GCM Grosvenor position performs unexpectedly, Landsea Homes 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 Landsea Homes will offset losses from the drop in Landsea Homes' long position.| GCM Grosvenor vs. MFS Investment Grade | GCM Grosvenor vs. Eaton Vance National | GCM Grosvenor vs. Nuveen California Select | GCM Grosvenor vs. Federated Premier Municipal |
| Landsea Homes vs. GCM Grosvenor | Landsea Homes vs. AerSale Corp | Landsea Homes vs. Arko Corp | Landsea Homes vs. Advantage Solutions |
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 Portfolio Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.
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