Correlation Between Nuveen Municipalome and GCM Grosvenor

Can any of the company-specific risk be diversified away by investing in both Nuveen Municipalome 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 Municipalome 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 Municipalome and GCM Grosvenor, you can compare the effects of market volatilities on Nuveen Municipalome 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 Municipalome with a short position of GCM Grosvenor. Check out your portfolio center. Please also check ongoing floating volatility patterns of Nuveen Municipalome and GCM Grosvenor.

Diversification Opportunities for Nuveen Municipalome and GCM Grosvenor

-0.75

Correlation Coefficient

Nuveen Municipalome  GCM Grosvenor

Pay attention - limited upside

The 3 months correlation between Nuveen and GCM is -0.75. Overlapping area represents the amount of risk that can be diversified away by holding Nuveen Municipalome and GCM Grosvenor in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on GCM Grosvenor and Nuveen Municipalome 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 Municipalome 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 Municipalome i.e., Nuveen Municipalome and GCM Grosvenor go up and down completely randomly.

Pair Corralation between Nuveen Municipalome and GCM Grosvenor

Considering the 90-day investment horizon Nuveen Municipalome is expected to under-perform the GCM Grosvenor. But the fund apears to be less risky and, when comparing its historical volatility, Nuveen Municipalome is 22.04 times less risky than GCM Grosvenor. The fund trades about -0.21 of its potential returns per unit of risk. The GCM Grosvenor is currently generating about 0.15 of returns per unit of risk over similar time horizon. If you would invest  70.00  in GCM Grosvenor on September 13, 2024 and sell it today you would earn a total of  52.00  from holding GCM Grosvenor or generate 74.29% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Weak
Accuracy	95.24%
Values	Daily Returns

Nuveen Municipalome  vs.  GCM Grosvenor

Nuveen Municipalome

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Nuveen Municipalome has generated negative risk-adjusted returns adding no value to fund investors. Despite fairly strong primary indicators, Nuveen Municipalome is not utilizing all of its potentials. The recent stock price confusion, may contribute to short-horizon losses for the traders.

GCM Grosvenor

Risk-Adjusted Performance

12 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in GCM Grosvenor are ranked lower than 12 (%) 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.

Pair Trading with Nuveen Municipalome and GCM Grosvenor

The main advantage of trading using opposite Nuveen Municipalome and GCM Grosvenor positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Nuveen Municipalome 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 Municipalome 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 Stock Tickers module to use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites.