Correlation Between 1812 Brewing and GCM Grosvenor

Can any of the company-specific risk be diversified away by investing in both 1812 Brewing 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 1812 Brewing and GCM Grosvenor into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between 1812 Brewing and GCM Grosvenor, you can compare the effects of market volatilities on 1812 Brewing 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 1812 Brewing with a short position of GCM Grosvenor. Check out your portfolio center. Please also check ongoing floating volatility patterns of 1812 Brewing and GCM Grosvenor.

Diversification Opportunities for 1812 Brewing and GCM Grosvenor

-0.19

Correlation Coefficient

1812 Brewing  GCM Grosvenor

Good diversification

The 3 months correlation between 1812 and GCM is -0.19. Overlapping area represents the amount of risk that can be diversified away by holding 1812 Brewing and GCM Grosvenor in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on GCM Grosvenor and 1812 Brewing 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 1812 Brewing 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 1812 Brewing i.e., 1812 Brewing and GCM Grosvenor go up and down completely randomly.

Pair Corralation between 1812 Brewing and GCM Grosvenor

Given the investment horizon of 90 days 1812 Brewing is expected to generate 386.96 times more return on investment than GCM Grosvenor. However, 1812 Brewing is 386.96 times more volatile than GCM Grosvenor. It trades about 0.41 of its potential returns per unit of risk. GCM Grosvenor is currently generating about 0.33 per unit of risk. If you would invest  0.01  in 1812 Brewing on September 16, 2024 and sell it today you would earn a total of  0.00  from holding 1812 Brewing or generate 0.0% return on investment over 90 days.

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

1812 Brewing  vs.  GCM Grosvenor

1812 Brewing

Risk-Adjusted Performance

22 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in 1812 Brewing are ranked lower than 22 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively weak technical and fundamental indicators, 1812 Brewing unveiled solid returns over the last few months and may actually be approaching a breakup point.

GCM Grosvenor

Risk-Adjusted Performance

10 of 100

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. Despite nearly inconsistent primary indicators, GCM Grosvenor may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Pair Trading with 1812 Brewing and GCM Grosvenor

The main advantage of trading using opposite 1812 Brewing and GCM Grosvenor positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if 1812 Brewing 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 1812 Brewing 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.

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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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.