Correlation Between GCM Grosvenor and MFS Investment
Can any of the company-specific risk be diversified away by investing in both GCM Grosvenor and MFS Investment 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 MFS Investment into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between GCM Grosvenor and MFS Investment Grade, you can compare the effects of market volatilities on GCM Grosvenor and MFS Investment 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 MFS Investment. Check out your portfolio center. Please also check ongoing floating volatility patterns of GCM Grosvenor and MFS Investment.
Diversification Opportunities for GCM Grosvenor and MFS Investment
0.21 | Correlation Coefficient |
Modest diversification
The 3 months correlation between GCM and MFS is 0.21. Overlapping area represents the amount of risk that can be diversified away by holding GCM Grosvenor and MFS Investment Grade in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on MFS Investment Grade 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 MFS Investment. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of MFS Investment Grade has no effect on the direction of GCM Grosvenor i.e., GCM Grosvenor and MFS Investment go up and down completely randomly.
Pair Corralation between GCM Grosvenor and MFS Investment
Assuming the 90 days horizon GCM Grosvenor is expected to generate 17.54 times more return on investment than MFS Investment. However, GCM Grosvenor is 17.54 times more volatile than MFS Investment Grade. It trades about 0.18 of its potential returns per unit of risk. MFS Investment Grade is currently generating about 0.09 per unit of risk. If you would invest 100.00 in GCM Grosvenor on August 29, 2024 and sell it today you would earn a total of 29.00 from holding GCM Grosvenor or generate 29.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 95.45% |
| Values | Daily Returns |
GCM Grosvenor vs. MFS Investment Grade
Performance |
| Timeline |
| GCM Grosvenor |
| MFS Investment Grade |
GCM Grosvenor and MFS Investment Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with GCM Grosvenor and MFS Investment
The main advantage of trading using opposite GCM Grosvenor and MFS Investment positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if GCM Grosvenor position performs unexpectedly, MFS Investment 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 MFS Investment will offset losses from the drop in MFS Investment's long position.| GCM Grosvenor vs. Aurora Innovation | GCM Grosvenor vs. HUMANA INC | GCM Grosvenor vs. Aquagold International | GCM Grosvenor vs. Barloworld Ltd ADR |
| MFS Investment vs. Aurora Innovation | MFS Investment vs. HUMANA INC | MFS Investment vs. Aquagold International | MFS Investment vs. Barloworld Ltd ADR |
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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.
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