Correlation Between Xp and GCM Grosvenor
Can any of the company-specific risk be diversified away by investing in both Xp 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 Xp and GCM Grosvenor into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Xp Inc and GCM Grosvenor, you can compare the effects of market volatilities on Xp 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 Xp with a short position of GCM Grosvenor. Check out your portfolio center. Please also check ongoing floating volatility patterns of Xp and GCM Grosvenor.
Diversification Opportunities for Xp and GCM Grosvenor
-0.68 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Xp and GCM is -0.68. Overlapping area represents the amount of risk that can be diversified away by holding Xp Inc and GCM Grosvenor in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on GCM Grosvenor and Xp 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 Xp Inc 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 Xp i.e., Xp and GCM Grosvenor go up and down completely randomly.
Pair Corralation between Xp and GCM Grosvenor
Allowing for the 90-day total investment horizon Xp Inc is expected to under-perform the GCM Grosvenor. In addition to that, Xp is 1.55 times more volatile than GCM Grosvenor. It trades about -0.11 of its total potential returns per unit of risk. GCM Grosvenor is currently generating about 0.17 per unit of volatility. If you would invest 1,065 in GCM Grosvenor on August 28, 2024 and sell it today you would earn a total of 170.00 from holding GCM Grosvenor or generate 15.96% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Xp Inc vs. GCM Grosvenor
Performance |
| Timeline |
| Xp Inc |
| GCM Grosvenor |
Xp and GCM Grosvenor Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Xp and GCM Grosvenor
The main advantage of trading using opposite Xp and GCM Grosvenor positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Xp 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.| Xp vs. Up Fintech Holding | Xp vs. Bit Digital | Xp vs. Marathon Digital Holdings | Xp vs. MarketAxess Holdings |
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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 Stock Tickers module to use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites.
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