Correlation Between GCM Grosvenor and Turquoise Hill

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

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

Diversification Opportunities for GCM Grosvenor and Turquoise Hill

0.0

Correlation Coefficient

GCM Grosvenor  Turquoise Hill

Pay attention - limited upside

The 3 months correlation between GCM and Turquoise is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding GCM Grosvenor and Turquoise Hill Resources in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Turquoise Hill Resources 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 Turquoise Hill. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Turquoise Hill Resources has no effect on the direction of GCM Grosvenor i.e., GCM Grosvenor and Turquoise Hill go up and down completely randomly.

Pair Corralation between GCM Grosvenor and Turquoise Hill

If you would invest  126.00  in GCM Grosvenor on December 28, 2024 and sell it today you would earn a total of  74.00  from holding GCM Grosvenor or generate 58.73% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	0.0%
Values	Daily Returns

GCM Grosvenor  vs.  Turquoise Hill Resources

GCM Grosvenor

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in GCM Grosvenor are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. In spite of fairly fragile technical and fundamental indicators, GCM Grosvenor showed solid returns over the last few months and may actually be approaching a breakup point.

Turquoise Hill Resources

Risk-Adjusted Performance

Very Weak

Over the last 90 days Turquoise Hill Resources has generated negative risk-adjusted returns adding no value to investors with long positions. Even with relatively invariable basic indicators, Turquoise Hill is not utilizing all of its potentials. The current stock price agitation, may contribute to short-term losses for the retail investors.

Pair Trading with GCM Grosvenor and Turquoise Hill

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

The idea behind GCM Grosvenor and Turquoise Hill Resources 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 Equity Valuation module to check real value of public entities based on technical and fundamental data.