Correlation Between GCM Grosvenor and Gladstone Investment
Can any of the company-specific risk be diversified away by investing in both GCM Grosvenor and Gladstone Investment 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 Gladstone Investment into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between GCM Grosvenor and Gladstone Investment, you can compare the effects of market volatilities on GCM Grosvenor and Gladstone Investment 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 Gladstone Investment. Check out your portfolio center. Please also check ongoing floating volatility patterns of GCM Grosvenor and Gladstone Investment.
Diversification Opportunities for GCM Grosvenor and Gladstone Investment
-0.5 | Correlation Coefficient |
Very good diversification
The 3 months correlation between GCM and Gladstone is -0.5. Overlapping area represents the amount of risk that can be diversified away by holding GCM Grosvenor and Gladstone Investment in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Gladstone Investment 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 Gladstone Investment. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Gladstone Investment has no effect on the direction of GCM Grosvenor i.e., GCM Grosvenor and Gladstone Investment go up and down completely randomly.
Pair Corralation between GCM Grosvenor and Gladstone Investment
Assuming the 90 days horizon GCM Grosvenor is expected to generate 80.86 times more return on investment than Gladstone Investment. However, GCM Grosvenor is 80.86 times more volatile than Gladstone Investment. It trades about 0.08 of its potential returns per unit of risk. Gladstone Investment is currently generating about 0.04 per unit of risk. If you would invest 44.00 in GCM Grosvenor on September 20, 2024 and sell it today you would earn a total of 48.00 from holding GCM Grosvenor or generate 109.09% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Very Weak |
Accuracy | 83.03% |
Values | Daily Returns |
GCM Grosvenor vs. Gladstone Investment
Performance |
Timeline |
GCM Grosvenor |
Gladstone Investment |
GCM Grosvenor and Gladstone Investment Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with GCM Grosvenor and Gladstone Investment
The main advantage of trading using opposite GCM Grosvenor and Gladstone Investment positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if GCM Grosvenor position performs unexpectedly, Gladstone Investment 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 Gladstone Investment will offset losses from the drop in Gladstone Investment's long position.The idea behind GCM Grosvenor and Gladstone Investment 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.Gladstone Investment vs. Gladstone Investment | Gladstone Investment vs. B Riley Financial | Gladstone Investment vs. B Riley Financial | Gladstone Investment vs. B Riley Financial, |
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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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