Correlation Between GCM Grosvenor and Algonquin Power
Can any of the company-specific risk be diversified away by investing in both GCM Grosvenor and Algonquin Power 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 Algonquin Power into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between GCM Grosvenor and Algonquin Power Utilities, you can compare the effects of market volatilities on GCM Grosvenor and Algonquin Power 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 Algonquin Power. Check out your portfolio center. Please also check ongoing floating volatility patterns of GCM Grosvenor and Algonquin Power.
Diversification Opportunities for GCM Grosvenor and Algonquin Power
0.63 | Correlation Coefficient |
Poor diversification
The 3 months correlation between GCM and Algonquin is 0.63. Overlapping area represents the amount of risk that can be diversified away by holding GCM Grosvenor and Algonquin Power Utilities in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Algonquin Power Utilities 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 Algonquin Power. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Algonquin Power Utilities has no effect on the direction of GCM Grosvenor i.e., GCM Grosvenor and Algonquin Power go up and down completely randomly.
Pair Corralation between GCM Grosvenor and Algonquin Power
If you would invest 31.00 in GCM Grosvenor on September 4, 2024 and sell it today you would earn a total of 94.00 from holding GCM Grosvenor or generate 303.23% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 0.48% |
| Values | Daily Returns |
GCM Grosvenor vs. Algonquin Power Utilities
Performance |
| Timeline |
| GCM Grosvenor |
| Algonquin Power Utilities |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
GCM Grosvenor and Algonquin Power Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with GCM Grosvenor and Algonquin Power
The main advantage of trading using opposite GCM Grosvenor and Algonquin Power positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if GCM Grosvenor position performs unexpectedly, Algonquin Power 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 Algonquin Power will offset losses from the drop in Algonquin Power's long position.| GCM Grosvenor vs. GCM Grosvenor | GCM Grosvenor vs. Glory Star New | GCM Grosvenor vs. Eos Energy Enterprises |
| Algonquin Power vs. Algonquin Power Utilities | Algonquin Power vs. CMS Energy Corp | Algonquin Power vs. CMS Energy Corp | Algonquin Power vs. Argo Group 65 |
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 Pattern Recognition module to use different Pattern Recognition models to time the market across multiple global exchanges.
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