Correlation Between GCM Grosvenor and Invesco Trust
Can any of the company-specific risk be diversified away by investing in both GCM Grosvenor and Invesco Trust 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 Invesco Trust into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between GCM Grosvenor and Invesco Trust For, you can compare the effects of market volatilities on GCM Grosvenor and Invesco Trust 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 Invesco Trust. Check out your portfolio center. Please also check ongoing floating volatility patterns of GCM Grosvenor and Invesco Trust.
Diversification Opportunities for GCM Grosvenor and Invesco Trust
-0.16 | Correlation Coefficient |
Good diversification
The 3 months correlation between GCM and Invesco is -0.16. Overlapping area represents the amount of risk that can be diversified away by holding GCM Grosvenor and Invesco Trust For in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Invesco Trust For 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 Invesco Trust. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Invesco Trust For has no effect on the direction of GCM Grosvenor i.e., GCM Grosvenor and Invesco Trust go up and down completely randomly.
Pair Corralation between GCM Grosvenor and Invesco Trust
Assuming the 90 days horizon GCM Grosvenor is expected to generate 14.84 times more return on investment than Invesco Trust. However, GCM Grosvenor is 14.84 times more volatile than Invesco Trust For. It trades about 0.17 of its potential returns per unit of risk. Invesco Trust For is currently generating about 0.05 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 Against |
| Strength | Insignificant |
| Accuracy | 95.65% |
| Values | Daily Returns |
GCM Grosvenor vs. Invesco Trust For
Performance |
| Timeline |
| GCM Grosvenor |
| Invesco Trust For |
GCM Grosvenor and Invesco Trust Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with GCM Grosvenor and Invesco Trust
The main advantage of trading using opposite GCM Grosvenor and Invesco Trust positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if GCM Grosvenor position performs unexpectedly, Invesco Trust 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 Invesco Trust will offset losses from the drop in Invesco Trust's long position.The idea behind GCM Grosvenor and Invesco Trust For 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.| Invesco Trust vs. Invesco Municipal Income | Invesco Trust vs. DWS Municipal Income | Invesco Trust vs. MFS Municipal Income | Invesco Trust vs. MFS High Income |
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 Transaction History module to view history of all your transactions and understand their impact on performance.
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