Correlation Between Tradeweb Markets and GCM Grosvenor
Can any of the company-specific risk be diversified away by investing in both Tradeweb Markets 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 Tradeweb Markets and GCM Grosvenor into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Tradeweb Markets and GCM Grosvenor, you can compare the effects of market volatilities on Tradeweb Markets 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 Tradeweb Markets with a short position of GCM Grosvenor. Check out your portfolio center. Please also check ongoing floating volatility patterns of Tradeweb Markets and GCM Grosvenor.
Diversification Opportunities for Tradeweb Markets and GCM Grosvenor
0.76 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Tradeweb and GCM is 0.76. Overlapping area represents the amount of risk that can be diversified away by holding Tradeweb Markets and GCM Grosvenor in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on GCM Grosvenor and Tradeweb Markets 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 Tradeweb Markets 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 Tradeweb Markets i.e., Tradeweb Markets and GCM Grosvenor go up and down completely randomly.
Pair Corralation between Tradeweb Markets and GCM Grosvenor
Allowing for the 90-day total investment horizon Tradeweb Markets is expected to generate 2.09 times less return on investment than GCM Grosvenor. But when comparing it to its historical volatility, Tradeweb Markets is 1.58 times less risky than GCM Grosvenor. It trades about 0.08 of its potential returns per unit of risk. GCM Grosvenor is currently generating about 0.11 of returns per unit of risk over similar time horizon. If you would invest 1,182 in GCM Grosvenor on August 25, 2024 and sell it today you would earn a total of 51.00 from holding GCM Grosvenor or generate 4.31% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Tradeweb Markets vs. GCM Grosvenor
Performance |
| Timeline |
| Tradeweb Markets |
| GCM Grosvenor |
Tradeweb Markets and GCM Grosvenor Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Tradeweb Markets and GCM Grosvenor
The main advantage of trading using opposite Tradeweb Markets and GCM Grosvenor positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Tradeweb Markets 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.| Tradeweb Markets vs. Raymond James Financial | Tradeweb Markets vs. PJT Partners | Tradeweb Markets vs. Moelis Co | Tradeweb Markets vs. LPL Financial Holdings |
| GCM Grosvenor vs. MFS Investment Grade | GCM Grosvenor vs. Invesco High Income | GCM Grosvenor vs. Eaton Vance National | GCM Grosvenor vs. Nuveen California Select |
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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.
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