Correlation Between GCM Grosvenor and Bonterra Resources
Can any of the company-specific risk be diversified away by investing in both GCM Grosvenor and Bonterra 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 Bonterra 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 Bonterra Resources, you can compare the effects of market volatilities on GCM Grosvenor and Bonterra 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 Bonterra Resources. Check out your portfolio center. Please also check ongoing floating volatility patterns of GCM Grosvenor and Bonterra Resources.
Diversification Opportunities for GCM Grosvenor and Bonterra Resources
-0.04 | Correlation Coefficient |
Good diversification
The 3 months correlation between GCM and Bonterra is -0.04. Overlapping area represents the amount of risk that can be diversified away by holding GCM Grosvenor and Bonterra Resources in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bonterra 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 Bonterra Resources. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bonterra Resources has no effect on the direction of GCM Grosvenor i.e., GCM Grosvenor and Bonterra Resources go up and down completely randomly.
Pair Corralation between GCM Grosvenor and Bonterra Resources
Assuming the 90 days horizon GCM Grosvenor is expected to generate 1.71 times more return on investment than Bonterra Resources. However, GCM Grosvenor is 1.71 times more volatile than Bonterra Resources. It trades about 0.16 of its potential returns per unit of risk. Bonterra Resources is currently generating about 0.1 per unit of risk. If you would invest 201.00 in GCM Grosvenor on November 28, 2024 and sell it today you would earn a total of 41.00 from holding GCM Grosvenor or generate 20.4% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 95.24% |
| Values | Daily Returns |
GCM Grosvenor vs. Bonterra Resources
Performance |
| Timeline |
| GCM Grosvenor |
| Bonterra Resources |
GCM Grosvenor and Bonterra Resources Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with GCM Grosvenor and Bonterra Resources
The main advantage of trading using opposite GCM Grosvenor and Bonterra Resources positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if GCM Grosvenor position performs unexpectedly, Bonterra 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 Bonterra Resources will offset losses from the drop in Bonterra Resources' long position.The idea behind GCM Grosvenor and Bonterra 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.| Bonterra Resources vs. Gander Gold | Bonterra Resources vs. Sokoman Minerals Corp | Bonterra Resources vs. Labrador Gold Corp | Bonterra Resources vs. Precipitate Gold Corp |
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 ETFs module to find actively traded Exchange Traded Funds (ETF) from around the world.
Other Complementary Tools
| Analyst Advice Analyst recommendations and target price estimates broken down by several categories | |
| Pair Correlation Compare performance and examine fundamental relationship between any two equity instruments | |
| Idea Analyzer Analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas | |
| Equity Valuation Check real value of public entities based on technical and fundamental data | |
| Economic Indicators Top statistical indicators that provide insights into how an economy is performing |