Correlation Between Oak Woods and GCM Grosvenor
Can any of the company-specific risk be diversified away by investing in both Oak Woods and GCM Grosvenor 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 Oak Woods and GCM Grosvenor into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Oak Woods Acquisition and GCM Grosvenor, you can compare the effects of market volatilities on Oak Woods and GCM Grosvenor 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 Oak Woods with a short position of GCM Grosvenor. Check out your portfolio center. Please also check ongoing floating volatility patterns of Oak Woods and GCM Grosvenor.
Diversification Opportunities for Oak Woods and GCM Grosvenor
0.51 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Oak and GCM is 0.51. Overlapping area represents the amount of risk that can be diversified away by holding Oak Woods Acquisition and GCM Grosvenor in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on GCM Grosvenor and Oak Woods 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 Oak Woods Acquisition are associated (or correlated) with GCM Grosvenor. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of GCM Grosvenor has no effect on the direction of Oak Woods i.e., Oak Woods and GCM Grosvenor go up and down completely randomly.
Pair Corralation between Oak Woods and GCM Grosvenor
Assuming the 90 days horizon Oak Woods is expected to generate 229.07 times less return on investment than GCM Grosvenor. But when comparing it to its historical volatility, Oak Woods Acquisition is 110.74 times less risky than GCM Grosvenor. It trades about 0.04 of its potential returns per unit of risk. GCM Grosvenor is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest 34.00 in GCM Grosvenor on September 2, 2024 and sell it today you would earn a total of 106.00 from holding GCM Grosvenor or generate 311.76% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 83.06% |
| Values | Daily Returns |
Oak Woods Acquisition vs. GCM Grosvenor
Performance |
| Timeline |
| Oak Woods Acquisition |
| GCM Grosvenor |
Oak Woods and GCM Grosvenor Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Oak Woods and GCM Grosvenor
The main advantage of trading using opposite Oak Woods and GCM Grosvenor positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Oak Woods position performs unexpectedly, GCM Grosvenor 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 GCM Grosvenor will offset losses from the drop in GCM Grosvenor's long position.| Oak Woods vs. Timken Company | Oak Woods vs. Estee Lauder Companies | Oak Woods vs. Eastern Co | Oak Woods vs. Valneva SE ADR |
| GCM Grosvenor vs. Visa Class A | GCM Grosvenor vs. Diamond Hill Investment | GCM Grosvenor vs. Distoken Acquisition | GCM Grosvenor vs. Associated Capital Group |
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 Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.
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