Correlation Between GCM Grosvenor and New Age
Can any of the company-specific risk be diversified away by investing in both GCM Grosvenor and New Age 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 New Age into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between GCM Grosvenor and New Age Metals, you can compare the effects of market volatilities on GCM Grosvenor and New Age 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 New Age. Check out your portfolio center. Please also check ongoing floating volatility patterns of GCM Grosvenor and New Age.
Diversification Opportunities for GCM Grosvenor and New Age
-0.56 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between GCM and New is -0.56. Overlapping area represents the amount of risk that can be diversified away by holding GCM Grosvenor and New Age Metals in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on New Age Metals 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 New Age. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of New Age Metals has no effect on the direction of GCM Grosvenor i.e., GCM Grosvenor and New Age go up and down completely randomly.
Pair Corralation between GCM Grosvenor and New Age
Assuming the 90 days horizon GCM Grosvenor is expected to generate 1.07 times more return on investment than New Age. However, GCM Grosvenor is 1.07 times more volatile than New Age Metals. It trades about 0.2 of its potential returns per unit of risk. New Age Metals is currently generating about -0.05 per unit of risk. If you would invest 121.00 in GCM Grosvenor on October 26, 2024 and sell it today you would earn a total of 89.00 from holding GCM Grosvenor or generate 73.55% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
GCM Grosvenor vs. New Age Metals
Performance |
| Timeline |
| GCM Grosvenor |
| New Age Metals |
GCM Grosvenor and New Age Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with GCM Grosvenor and New Age
The main advantage of trading using opposite GCM Grosvenor and New Age positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if GCM Grosvenor position performs unexpectedly, New Age 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 New Age will offset losses from the drop in New Age's long position.| GCM Grosvenor vs. GCM Grosvenor | GCM Grosvenor vs. Glory Star New | GCM Grosvenor vs. Eos Energy Enterprises |
| New Age vs. Vision Lithium | New Age vs. Group Ten Metals | New Age vs. Generation Mining Limited | New Age vs. Nickel Creek Platinum |
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 Equity Forecasting module to use basic forecasting models to generate price predictions and determine price momentum.
Other Complementary Tools
| Equity Valuation Check real value of public entities based on technical and fundamental data | |
| Global Correlations Find global opportunities by holding instruments from different markets | |
| Idea Analyzer Analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas | |
| Cryptocurrency Center Build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency | |
| AI Portfolio Architect Use AI to generate optimal portfolios and find profitable investment opportunities |