Correlation Between Invesco Municipal and GCM Grosvenor
Can any of the company-specific risk be diversified away by investing in both Invesco Municipal 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 Invesco Municipal and GCM Grosvenor into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Invesco Municipal Opportunity and GCM Grosvenor, you can compare the effects of market volatilities on Invesco Municipal 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 Invesco Municipal with a short position of GCM Grosvenor. Check out your portfolio center. Please also check ongoing floating volatility patterns of Invesco Municipal and GCM Grosvenor.
Diversification Opportunities for Invesco Municipal and GCM Grosvenor
-0.14 | Correlation Coefficient |
Good diversification
The 3 months correlation between Invesco and GCM is -0.14. Overlapping area represents the amount of risk that can be diversified away by holding Invesco Municipal Opportunity and GCM Grosvenor in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on GCM Grosvenor and Invesco Municipal 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 Invesco Municipal Opportunity 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 Invesco Municipal i.e., Invesco Municipal and GCM Grosvenor go up and down completely randomly.
Pair Corralation between Invesco Municipal and GCM Grosvenor
Considering the 90-day investment horizon Invesco Municipal is expected to generate 31.03 times less return on investment than GCM Grosvenor. But when comparing it to its historical volatility, Invesco Municipal Opportunity is 15.21 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 0.17 of returns per unit of risk over similar time horizon. If you would invest 77.00 in GCM Grosvenor on September 3, 2024 and sell it today you would earn a total of 63.00 from holding GCM Grosvenor or generate 81.82% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 92.19% |
| Values | Daily Returns |
Invesco Municipal Opportunity vs. GCM Grosvenor
Performance |
| Timeline |
| Invesco Municipal |
| GCM Grosvenor |
Invesco Municipal and GCM Grosvenor Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Invesco Municipal and GCM Grosvenor
The main advantage of trading using opposite Invesco Municipal and GCM Grosvenor positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Invesco Municipal 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.| Invesco Municipal vs. Invesco Quality Municipal | Invesco Municipal vs. Invesco Advantage MIT | Invesco Municipal vs. Invesco Municipal Trust | Invesco Municipal vs. Invesco California Value |
| GCM Grosvenor vs. Federated Premier Municipal | GCM Grosvenor vs. Blackrock Muniyield | GCM Grosvenor vs. Diamond Hill Investment | GCM Grosvenor vs. Federated Investors B |
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 Bond Analysis module to evaluate and analyze corporate bonds as a potential investment for your portfolios..
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