Correlation Between Nuveen Multi and GCM Grosvenor

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

By analyzing existing cross correlation between Nuveen Multi Mrkt and GCM Grosvenor, you can compare the effects of market volatilities on Nuveen Multi and GCM Grosvenor 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 Nuveen Multi with a short position of GCM Grosvenor. Check out your portfolio center. Please also check ongoing floating volatility patterns of Nuveen Multi and GCM Grosvenor.

Diversification Opportunities for Nuveen Multi and GCM Grosvenor

0.39

Correlation Coefficient

Nuveen Multi  GCM Grosvenor

Weak diversification

The 3 months correlation between Nuveen and GCM is 0.39. Overlapping area represents the amount of risk that can be diversified away by holding Nuveen Multi Mrkt and GCM Grosvenor in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on GCM Grosvenor and Nuveen Multi 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 Nuveen Multi Mrkt are associated (or correlated) with GCM Grosvenor. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of GCM Grosvenor has no effect on the direction of Nuveen Multi i.e., Nuveen Multi and GCM Grosvenor go up and down completely randomly.

Pair Corralation between Nuveen Multi and GCM Grosvenor

Considering the 90-day investment horizon Nuveen Multi is expected to generate 5.42 times less return on investment than GCM Grosvenor. But when comparing it to its historical volatility, Nuveen Multi Mrkt is 1.55 times less risky than GCM Grosvenor. It trades about 0.05 of its potential returns per unit of risk. GCM Grosvenor is currently generating about 0.17 of returns per unit of risk over similar time horizon. If you would invest  1,230  in GCM Grosvenor on November 29, 2024 and sell it today you would earn a total of  160.00  from holding GCM Grosvenor or generate 13.01% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	100.0%
Values	Daily Returns

Nuveen Multi Mrkt  vs.  GCM Grosvenor

Nuveen Multi Mrkt

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Nuveen Multi Mrkt are ranked lower than 3 (%) of all funds and portfolios of funds over the last 90 days. In spite of very healthy primary indicators, Nuveen Multi is not utilizing all of its potentials. The current stock price disarray, may contribute to short-term losses for the investors.

GCM Grosvenor

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in GCM Grosvenor are ranked lower than 13 (%) of all global equities and portfolios over the last 90 days. Despite nearly inconsistent primary indicators, GCM Grosvenor reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Nuveen Multi and GCM Grosvenor

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

The idea behind Nuveen Multi Mrkt and GCM Grosvenor 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.

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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..