Correlation Between Thrivent High and GCM Grosvenor

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

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

Diversification Opportunities for Thrivent High and GCM Grosvenor

0.44

Correlation Coefficient

Thrivent High  GCM Grosvenor

Very weak diversification

The 3 months correlation between Thrivent and GCM is 0.44. Overlapping area represents the amount of risk that can be diversified away by holding Thrivent High Yield and GCM Grosvenor in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on GCM Grosvenor and Thrivent High 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 Thrivent High Yield 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 Thrivent High i.e., Thrivent High and GCM Grosvenor go up and down completely randomly.

Pair Corralation between Thrivent High and GCM Grosvenor

Assuming the 90 days horizon Thrivent High Yield is expected to under-perform the GCM Grosvenor. But the mutual fund apears to be less risky and, when comparing its historical volatility, Thrivent High Yield is 56.45 times less risky than GCM Grosvenor. The mutual fund trades about -0.03 of its potential returns per unit of risk. The GCM Grosvenor is currently generating about 0.11 of returns per unit of risk over similar time horizon. If you would invest  100.00  in GCM Grosvenor on September 26, 2024 and sell it today you would earn a total of  27.00  from holding GCM Grosvenor or generate 27.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	97.56%
Values	Daily Returns

Thrivent High Yield  vs.  GCM Grosvenor

Thrivent High Yield

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Thrivent High Yield has generated negative risk-adjusted returns adding no value to fund investors. In spite of fairly strong forward indicators, Thrivent High is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

GCM Grosvenor

Risk-Adjusted Performance

8 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in GCM Grosvenor are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. In spite of fairly inconsistent technical and fundamental indicators, GCM Grosvenor showed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Thrivent High and GCM Grosvenor

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