Correlation Between GCM Grosvenor and Two Harbors
Can any of the company-specific risk be diversified away by investing in both GCM Grosvenor and Two Harbors 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 Two Harbors into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between GCM Grosvenor and Two Harbors Investments, you can compare the effects of market volatilities on GCM Grosvenor and Two Harbors 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 Two Harbors. Check out your portfolio center. Please also check ongoing floating volatility patterns of GCM Grosvenor and Two Harbors.
Diversification Opportunities for GCM Grosvenor and Two Harbors
-0.54 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between GCM and Two is -0.54. Overlapping area represents the amount of risk that can be diversified away by holding GCM Grosvenor and Two Harbors Investments in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Two Harbors Investments 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 Two Harbors. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Two Harbors Investments has no effect on the direction of GCM Grosvenor i.e., GCM Grosvenor and Two Harbors go up and down completely randomly.
Pair Corralation between GCM Grosvenor and Two Harbors
Assuming the 90 days horizon GCM Grosvenor is expected to generate 47.85 times more return on investment than Two Harbors. However, GCM Grosvenor is 47.85 times more volatile than Two Harbors Investments. It trades about 0.08 of its potential returns per unit of risk. Two Harbors Investments is currently generating about 0.01 per unit of risk. If you would invest 70.00 in GCM Grosvenor on August 27, 2024 and sell it today you would earn a total of 49.00 from holding GCM Grosvenor or generate 70.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 82.86% |
| Values | Daily Returns |
GCM Grosvenor vs. Two Harbors Investments
Performance |
| Timeline |
| GCM Grosvenor |
| Two Harbors Investments |
GCM Grosvenor and Two Harbors Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with GCM Grosvenor and Two Harbors
The main advantage of trading using opposite GCM Grosvenor and Two Harbors positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if GCM Grosvenor position performs unexpectedly, Two Harbors 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 Two Harbors will offset losses from the drop in Two Harbors' long position.| GCM Grosvenor vs. PowerUp Acquisition Corp | GCM Grosvenor vs. Aurora Innovation | GCM Grosvenor vs. HUMANA INC | GCM Grosvenor vs. Aquagold International |
| Two Harbors vs. New York Mortgage | Two Harbors vs. ARMOUR Residential REIT | Two Harbors vs. Annaly Capital Management | Two Harbors vs. AGNC Investment Corp |
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 Companies Directory module to evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals.
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