Correlation Between GCM Grosvenor and Xp
Can any of the company-specific risk be diversified away by investing in both GCM Grosvenor and Xp 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 Xp into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between GCM Grosvenor and Xp Inc, you can compare the effects of market volatilities on GCM Grosvenor and Xp 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 Xp. Check out your portfolio center. Please also check ongoing floating volatility patterns of GCM Grosvenor and Xp.
Diversification Opportunities for GCM Grosvenor and Xp
0.59 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between GCM and Xp is 0.59. Overlapping area represents the amount of risk that can be diversified away by holding GCM Grosvenor and Xp Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Xp Inc 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 Xp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Xp Inc has no effect on the direction of GCM Grosvenor i.e., GCM Grosvenor and Xp go up and down completely randomly.
Pair Corralation between GCM Grosvenor and Xp
Assuming the 90 days horizon GCM Grosvenor is expected to generate 4.72 times more return on investment than Xp. However, GCM Grosvenor is 4.72 times more volatile than Xp Inc. It trades about 0.13 of its potential returns per unit of risk. Xp Inc is currently generating about 0.04 per unit of risk. If you would invest 202.00 in GCM Grosvenor on December 1, 2024 and sell it today you would earn a total of 29.00 from holding GCM Grosvenor or generate 14.36% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 95.24% |
| Values | Daily Returns |
GCM Grosvenor vs. Xp Inc
Performance |
| Timeline |
| GCM Grosvenor |
| Xp Inc |
GCM Grosvenor and Xp Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with GCM Grosvenor and Xp
The main advantage of trading using opposite GCM Grosvenor and Xp positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if GCM Grosvenor position performs unexpectedly, Xp 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 Xp will offset losses from the drop in Xp's long position.The idea behind GCM Grosvenor and Xp Inc 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.| Xp vs. Up Fintech Holding | Xp vs. Bit Digital | Xp vs. Marathon Digital Holdings | Xp vs. MarketAxess Holdings |
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 Portfolio Suggestion module to get suggestions outside of your existing asset allocation including your own model portfolios.
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