Correlation Between GCM Grosvenor and Franklin Resources
Can any of the company-specific risk be diversified away by investing in both GCM Grosvenor and Franklin Resources 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 Franklin Resources into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between GCM Grosvenor and Franklin Resources, you can compare the effects of market volatilities on GCM Grosvenor and Franklin Resources 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 Franklin Resources. Check out your portfolio center. Please also check ongoing floating volatility patterns of GCM Grosvenor and Franklin Resources.
Diversification Opportunities for GCM Grosvenor and Franklin Resources
-0.77 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between GCM and Franklin is -0.77. Overlapping area represents the amount of risk that can be diversified away by holding GCM Grosvenor and Franklin Resources in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Franklin Resources 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 Franklin Resources. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Franklin Resources has no effect on the direction of GCM Grosvenor i.e., GCM Grosvenor and Franklin Resources go up and down completely randomly.
Pair Corralation between GCM Grosvenor and Franklin Resources
Assuming the 90 days horizon GCM Grosvenor is expected to generate 4.57 times more return on investment than Franklin Resources. However, GCM Grosvenor is 4.57 times more volatile than Franklin Resources. It trades about 0.07 of its potential returns per unit of risk. Franklin Resources is currently generating about 0.0 per unit of risk. If you would invest 34.00 in GCM Grosvenor on March 2, 2024 and sell it today you would earn a total of 23.00 from holding GCM Grosvenor or generate 67.65% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Weak |
Accuracy | 81.6% |
Values | Daily Returns |
GCM Grosvenor vs. Franklin Resources
Performance |
Timeline |
GCM Grosvenor |
Franklin Resources |
GCM Grosvenor and Franklin Resources Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with GCM Grosvenor and Franklin Resources
The main advantage of trading using opposite GCM Grosvenor and Franklin Resources positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if GCM Grosvenor position performs unexpectedly, Franklin Resources 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 Franklin Resources will offset losses from the drop in Franklin Resources' long position.GCM Grosvenor vs. Glory Star New | GCM Grosvenor vs. Whole Earth Brands | GCM Grosvenor vs. Eos Energy Enterprises |
Franklin Resources vs. Glory Star New | Franklin Resources vs. Whole Earth Brands | Franklin Resources vs. Eos Energy Enterprises |
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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.
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