Correlation Between GCM Grosvenor and Aquagold International

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

By analyzing existing cross correlation between GCM Grosvenor and Aquagold International, you can compare the effects of market volatilities on GCM Grosvenor and Aquagold International 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 Aquagold International. Check out your portfolio center. Please also check ongoing floating volatility patterns of GCM Grosvenor and Aquagold International.

Diversification Opportunities for GCM Grosvenor and Aquagold International

-0.61

Correlation Coefficient

GCM Grosvenor  Aquagold International

Excellent diversification

The 3 months correlation between GCM and Aquagold is -0.61. Overlapping area represents the amount of risk that can be diversified away by holding GCM Grosvenor and Aquagold International in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Aquagold International 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 Aquagold International. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Aquagold International has no effect on the direction of GCM Grosvenor i.e., GCM Grosvenor and Aquagold International go up and down completely randomly.

Pair Corralation between GCM Grosvenor and Aquagold International

Assuming the 90 days horizon GCM Grosvenor is expected to generate 0.69 times more return on investment than Aquagold International. However, GCM Grosvenor is 1.45 times less risky than Aquagold International. It trades about 0.21 of its potential returns per unit of risk. Aquagold International is currently generating about -0.13 per unit of risk. If you would invest  108.00  in GCM Grosvenor on November 19, 2024 and sell it today you would earn a total of  134.00  from holding GCM Grosvenor or generate 124.07% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Weak
Accuracy	96.77%
Values	Daily Returns

GCM Grosvenor  vs.  Aquagold International

GCM Grosvenor

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in GCM Grosvenor are ranked lower than 16 (%) of all global equities and portfolios over the last 90 days. In spite of fairly uncertain technical and fundamental indicators, GCM Grosvenor showed solid returns over the last few months and may actually be approaching a breakup point.

Aquagold International

Risk-Adjusted Performance

Very Weak

Over the last 90 days Aquagold International has generated negative risk-adjusted returns adding no value to investors with long positions. Despite weak performance in the last few months, the Stock's basic indicators remain fairly strong which may send shares a bit higher in March 2025. The recent confusion may also be a sign of long-lasting up-swing for the firm traders.

Pair Trading with GCM Grosvenor and Aquagold International

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

The idea behind GCM Grosvenor and Aquagold International 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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.