Correlation Between GCM Grosvenor and Cimpress
Can any of the company-specific risk be diversified away by investing in both GCM Grosvenor and Cimpress 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 Cimpress into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between GCM Grosvenor and Cimpress NV, you can compare the effects of market volatilities on GCM Grosvenor and Cimpress 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 Cimpress. Check out your portfolio center. Please also check ongoing floating volatility patterns of GCM Grosvenor and Cimpress.
Diversification Opportunities for GCM Grosvenor and Cimpress
-0.48 | Correlation Coefficient |
Very good diversification
The 3 months correlation between GCM and Cimpress is -0.48. Overlapping area represents the amount of risk that can be diversified away by holding GCM Grosvenor and Cimpress NV in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cimpress NV 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 Cimpress. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Cimpress NV has no effect on the direction of GCM Grosvenor i.e., GCM Grosvenor and Cimpress go up and down completely randomly.
Pair Corralation between GCM Grosvenor and Cimpress
Assuming the 90 days horizon GCM Grosvenor is expected to generate 26.76 times more return on investment than Cimpress. However, GCM Grosvenor is 26.76 times more volatile than Cimpress NV. It trades about 0.09 of its potential returns per unit of risk. Cimpress NV is currently generating about 0.06 per unit of risk. If you would invest 103.00 in GCM Grosvenor on September 1, 2024 and sell it today you would earn a total of 37.00 from holding GCM Grosvenor or generate 35.92% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 81.54% |
| Values | Daily Returns |
GCM Grosvenor vs. Cimpress NV
Performance |
| Timeline |
| GCM Grosvenor |
| Cimpress NV |
GCM Grosvenor and Cimpress Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with GCM Grosvenor and Cimpress
The main advantage of trading using opposite GCM Grosvenor and Cimpress positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if GCM Grosvenor position performs unexpectedly, Cimpress 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 Cimpress will offset losses from the drop in Cimpress' long position.The idea behind GCM Grosvenor and Cimpress NV 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.| Cimpress vs. Innovid Corp | Cimpress vs. Deluxe | Cimpress vs. Omnicom Group | Cimpress vs. Emerald Expositions Events |
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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.
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