Correlation Between SEI Investments and GCM Grosvenor
Can any of the company-specific risk be diversified away by investing in both SEI Investments 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 SEI Investments and GCM Grosvenor into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between SEI Investments and GCM Grosvenor, you can compare the effects of market volatilities on SEI Investments 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 SEI Investments with a short position of GCM Grosvenor. Check out your portfolio center. Please also check ongoing floating volatility patterns of SEI Investments and GCM Grosvenor.
Diversification Opportunities for SEI Investments and GCM Grosvenor
0.66 | Correlation Coefficient |
Poor diversification
The 3 months correlation between SEI and GCM is 0.66. Overlapping area represents the amount of risk that can be diversified away by holding SEI Investments and GCM Grosvenor in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on GCM Grosvenor and SEI Investments 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 SEI Investments 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 SEI Investments i.e., SEI Investments and GCM Grosvenor go up and down completely randomly.
Pair Corralation between SEI Investments and GCM Grosvenor
Given the investment horizon of 90 days SEI Investments is expected to generate 64.1 times less return on investment than GCM Grosvenor. But when comparing it to its historical volatility, SEI Investments is 73.97 times less risky than GCM Grosvenor. It trades about 0.09 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 4, 2024 and sell it today you would earn a total of 80.00 from holding GCM Grosvenor or generate 235.29% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 83.11% |
| Values | Daily Returns |
SEI Investments vs. GCM Grosvenor
Performance |
| Timeline |
| SEI Investments |
| GCM Grosvenor |
SEI Investments and GCM Grosvenor Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SEI Investments and GCM Grosvenor
The main advantage of trading using opposite SEI Investments and GCM Grosvenor positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SEI Investments 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.| SEI Investments vs. Commerce Bancshares | SEI Investments vs. RLI Corp | SEI Investments vs. Westamerica Bancorporation | SEI Investments vs. Brown Brown |
| GCM Grosvenor vs. GCM Grosvenor | GCM Grosvenor vs. Glory Star New | GCM Grosvenor vs. Eos Energy Enterprises |
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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.
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