Correlation Between GCM Grosvenor and Oroco Resource

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

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

Diversification Opportunities for GCM Grosvenor and Oroco Resource

-0.25

Correlation Coefficient

GCM Grosvenor  Oroco Resource

Very good diversification

The 3 months correlation between GCM and Oroco is -0.25. Overlapping area represents the amount of risk that can be diversified away by holding GCM Grosvenor and Oroco Resource Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Oroco Resource Corp 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 Oroco Resource. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Oroco Resource Corp has no effect on the direction of GCM Grosvenor i.e., GCM Grosvenor and Oroco Resource go up and down completely randomly.

Pair Corralation between GCM Grosvenor and Oroco Resource

Assuming the 90 days horizon GCM Grosvenor is expected to generate 1.48 times more return on investment than Oroco Resource. However, GCM Grosvenor is 1.48 times more volatile than Oroco Resource Corp. It trades about 0.15 of its potential returns per unit of risk. Oroco Resource Corp is currently generating about 0.13 per unit of risk. If you would invest  119.00  in GCM Grosvenor on December 27, 2024 and sell it today you would earn a total of  95.00  from holding GCM Grosvenor or generate 79.83% return on investment over 90 days.

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

GCM Grosvenor  vs.  Oroco Resource Corp

GCM Grosvenor

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in GCM Grosvenor are ranked lower than 12 (%) of all global equities and portfolios over the last 90 days. In spite of fairly abnormal technical and fundamental indicators, GCM Grosvenor showed solid returns over the last few months and may actually be approaching a breakup point.

Oroco Resource Corp

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Oroco Resource Corp are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile fundamental indicators, Oroco Resource reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with GCM Grosvenor and Oroco Resource

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

The idea behind GCM Grosvenor and Oroco Resource Corp 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 Portfolio Center module to all portfolio management and optimization tools to improve performance of your portfolios.