Correlation Between GCM Grosvenor and Invesco Trust

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

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

Diversification Opportunities for GCM Grosvenor and Invesco Trust

-0.08

Correlation Coefficient

GCM Grosvenor  Invesco Trust

Good diversification

The 3 months correlation between GCM and Invesco is -0.08. Overlapping area represents the amount of risk that can be diversified away by holding GCM Grosvenor and Invesco Trust For in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Invesco Trust For 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 Invesco Trust. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Invesco Trust For has no effect on the direction of GCM Grosvenor i.e., GCM Grosvenor and Invesco Trust go up and down completely randomly.

Pair Corralation between GCM Grosvenor and Invesco Trust

Assuming the 90 days horizon GCM Grosvenor is expected to generate 170.01 times more return on investment than Invesco Trust. However, GCM Grosvenor is 170.01 times more volatile than Invesco Trust For. It trades about 0.1 of its potential returns per unit of risk. Invesco Trust For is currently generating about 0.09 per unit of risk. If you would invest  31.00  in GCM Grosvenor on September 12, 2024 and sell it today you would earn a total of  87.85  from holding GCM Grosvenor or generate 283.39% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	85.08%
Values	Daily Returns

GCM Grosvenor  vs.  Invesco Trust For

GCM Grosvenor

Risk-Adjusted Performance

11 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in GCM Grosvenor are ranked lower than 11 (%) 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.

Invesco Trust For

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Invesco Trust For has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of very healthy technical and fundamental indicators, Invesco Trust is not utilizing all of its potentials. The current stock price disarray, may contribute to short-term losses for the investors.

Pair Trading with GCM Grosvenor and Invesco Trust

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

The idea behind GCM Grosvenor and Invesco Trust For 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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.