Correlation Between GCM Grosvenor and Aberdeen Australia

Can any of the company-specific risk be diversified away by investing in both GCM Grosvenor and Aberdeen Australia 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 GCM Grosvenor and Aberdeen Australia into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between GCM Grosvenor and Aberdeen Australia Ef, you can compare the effects of market volatilities on GCM Grosvenor and Aberdeen Australia 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 GCM Grosvenor with a short position of Aberdeen Australia. Check out your portfolio center. Please also check ongoing floating volatility patterns of GCM Grosvenor and Aberdeen Australia.

Diversification Opportunities for GCM Grosvenor and Aberdeen Australia

0.46

Correlation Coefficient

GCM Grosvenor  Aberdeen Australia

Very weak diversification

The 3 months correlation between GCM and Aberdeen is 0.46. Overlapping area represents the amount of risk that can be diversified away by holding GCM Grosvenor and Aberdeen Australia Ef in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Aberdeen Australia and GCM Grosvenor 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 GCM Grosvenor are associated (or correlated) with Aberdeen Australia. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Aberdeen Australia has no effect on the direction of GCM Grosvenor i.e., GCM Grosvenor and Aberdeen Australia go up and down completely randomly.

Pair Corralation between GCM Grosvenor and Aberdeen Australia

Given the investment horizon of 90 days GCM Grosvenor is expected to generate 1.41 times more return on investment than Aberdeen Australia. However, GCM Grosvenor is 1.41 times more volatile than Aberdeen Australia Ef. It trades about 0.11 of its potential returns per unit of risk. Aberdeen Australia Ef is currently generating about -0.03 per unit of risk. If you would invest  1,234  in GCM Grosvenor on December 28, 2024 and sell it today you would earn a total of  110.00  from holding GCM Grosvenor or generate 8.91% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	100.0%
Values	Daily Returns

GCM Grosvenor  vs.  Aberdeen Australia Ef

GCM Grosvenor

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in GCM Grosvenor are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. Despite nearly inconsistent primary indicators, GCM Grosvenor may actually be approaching a critical reversion point that can send shares even higher in April 2025.

Aberdeen Australia

Risk-Adjusted Performance

Very Weak

Over the last 90 days Aberdeen Australia Ef has generated negative risk-adjusted returns adding no value to fund investors. Despite nearly stable basic indicators, Aberdeen Australia is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

Pair Trading with GCM Grosvenor and Aberdeen Australia

The main advantage of trading using opposite GCM Grosvenor and Aberdeen Australia positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if GCM Grosvenor position performs unexpectedly, Aberdeen Australia 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 Aberdeen Australia will offset losses from the drop in Aberdeen Australia's long position.

The idea behind GCM Grosvenor and Aberdeen Australia Ef pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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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 Price Ceiling Movement module to calculate and plot Price Ceiling Movement for different equity instruments.