Correlation Between GCM Grosvenor and Mill City
Can any of the company-specific risk be diversified away by investing in both GCM Grosvenor and Mill City 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 Mill City into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between GCM Grosvenor and Mill City Ventures, you can compare the effects of market volatilities on GCM Grosvenor and Mill City 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 Mill City. Check out your portfolio center. Please also check ongoing floating volatility patterns of GCM Grosvenor and Mill City.
Diversification Opportunities for GCM Grosvenor and Mill City
-0.59 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between GCM and Mill is -0.59. Overlapping area represents the amount of risk that can be diversified away by holding GCM Grosvenor and Mill City Ventures in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mill City Ventures 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 Mill City. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Mill City Ventures has no effect on the direction of GCM Grosvenor i.e., GCM Grosvenor and Mill City go up and down completely randomly.
Pair Corralation between GCM Grosvenor and Mill City
Assuming the 90 days horizon GCM Grosvenor is expected to generate 1.31 times more return on investment than Mill City. However, GCM Grosvenor is 1.31 times more volatile than Mill City Ventures. It trades about 0.08 of its potential returns per unit of risk. Mill City Ventures is currently generating about 0.06 per unit of risk. If you would invest 73.00 in GCM Grosvenor on August 29, 2024 and sell it today you would earn a total of 53.00 from holding GCM Grosvenor or generate 72.6% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 87.82% |
| Values | Daily Returns |
GCM Grosvenor vs. Mill City Ventures
Performance |
| Timeline |
| GCM Grosvenor |
| Mill City Ventures |
GCM Grosvenor and Mill City Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with GCM Grosvenor and Mill City
The main advantage of trading using opposite GCM Grosvenor and Mill City positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if GCM Grosvenor position performs unexpectedly, Mill City 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 Mill City will offset losses from the drop in Mill City's long position.The idea behind GCM Grosvenor and Mill City Ventures 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.| Mill City vs. Consumer Portfolio Services | Mill City vs. Atlanticus Holdings Corp | Mill City vs. Nelnet Inc | Mill City vs. Senmiao Technology |
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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