Correlation Between GCM Grosvenor and Cascades
Can any of the company-specific risk be diversified away by investing in both GCM Grosvenor and Cascades 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 Cascades into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between GCM Grosvenor and Cascades, you can compare the effects of market volatilities on GCM Grosvenor and Cascades 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 Cascades. Check out your portfolio center. Please also check ongoing floating volatility patterns of GCM Grosvenor and Cascades.
Diversification Opportunities for GCM Grosvenor and Cascades
0.67 | Correlation Coefficient |
Poor diversification
The 3 months correlation between GCM and Cascades is 0.67. Overlapping area represents the amount of risk that can be diversified away by holding GCM Grosvenor and Cascades in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cascades 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 Cascades. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Cascades has no effect on the direction of GCM Grosvenor i.e., GCM Grosvenor and Cascades go up and down completely randomly.
Pair Corralation between GCM Grosvenor and Cascades
Assuming the 90 days horizon GCM Grosvenor is expected to generate 36.67 times more return on investment than Cascades. However, GCM Grosvenor is 36.67 times more volatile than Cascades. It trades about 0.1 of its potential returns per unit of risk. Cascades is currently generating about 0.01 per unit of risk. If you would invest 31.00 in GCM Grosvenor on September 3, 2024 and sell it today you would earn a total of 83.00 from holding GCM Grosvenor or generate 267.74% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 92.38% |
| Values | Daily Returns |
GCM Grosvenor vs. Cascades
Performance |
| Timeline |
| GCM Grosvenor |
| Cascades |
GCM Grosvenor and Cascades Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with GCM Grosvenor and Cascades
The main advantage of trading using opposite GCM Grosvenor and Cascades positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if GCM Grosvenor position performs unexpectedly, Cascades 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 Cascades will offset losses from the drop in Cascades' long position.| GCM Grosvenor vs. Federated Premier Municipal | GCM Grosvenor vs. Blackrock Muniyield | GCM Grosvenor vs. Federated Investors B | GCM Grosvenor vs. SEI Investments |
| Cascades vs. TriMas | Cascades vs. Myers Industries | Cascades vs. Reynolds Consumer Products | Cascades vs. Pactiv Evergreen |
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 Earnings Calls module to check upcoming earnings announcements updated hourly across public exchanges.
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