Correlation Between GCM Grosvenor and Ascot Resources
Can any of the company-specific risk be diversified away by investing in both GCM Grosvenor and Ascot Resources 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 Ascot Resources into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between GCM Grosvenor and Ascot Resources, you can compare the effects of market volatilities on GCM Grosvenor and Ascot Resources 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 Ascot Resources. Check out your portfolio center. Please also check ongoing floating volatility patterns of GCM Grosvenor and Ascot Resources.
Diversification Opportunities for GCM Grosvenor and Ascot Resources
-0.35 | Correlation Coefficient |
Very good diversification
The 3 months correlation between GCM and Ascot is -0.35. Overlapping area represents the amount of risk that can be diversified away by holding GCM Grosvenor and Ascot Resources in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ascot Resources 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 Ascot Resources. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ascot Resources has no effect on the direction of GCM Grosvenor i.e., GCM Grosvenor and Ascot Resources go up and down completely randomly.
Pair Corralation between GCM Grosvenor and Ascot Resources
Assuming the 90 days horizon GCM Grosvenor is expected to generate 16.86 times more return on investment than Ascot Resources. However, GCM Grosvenor is 16.86 times more volatile than Ascot Resources. It trades about 0.13 of its potential returns per unit of risk. Ascot Resources is currently generating about -0.07 per unit of risk. If you would invest 57.00 in GCM Grosvenor on September 1, 2024 and sell it today you would earn a total of 83.00 from holding GCM Grosvenor or generate 145.61% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 84.13% |
| Values | Daily Returns |
GCM Grosvenor vs. Ascot Resources
Performance |
| Timeline |
| GCM Grosvenor |
| Ascot Resources |
GCM Grosvenor and Ascot Resources Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with GCM Grosvenor and Ascot Resources
The main advantage of trading using opposite GCM Grosvenor and Ascot Resources positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if GCM Grosvenor position performs unexpectedly, Ascot Resources 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 Ascot Resources will offset losses from the drop in Ascot Resources' long position.The idea behind GCM Grosvenor and Ascot Resources pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.| Ascot Resources vs. South32 Limited | Ascot Resources vs. NioCorp Developments Ltd | Ascot Resources vs. HUMANA INC | Ascot Resources vs. SCOR PK |
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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.
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