Correlation Between GCM Grosvenor and Benton Resources
Can any of the company-specific risk be diversified away by investing in both GCM Grosvenor and Benton 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 Benton 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 Benton Resources, you can compare the effects of market volatilities on GCM Grosvenor and Benton 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 Benton Resources. Check out your portfolio center. Please also check ongoing floating volatility patterns of GCM Grosvenor and Benton Resources.
Diversification Opportunities for GCM Grosvenor and Benton Resources
-0.66 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between GCM and Benton is -0.66. Overlapping area represents the amount of risk that can be diversified away by holding GCM Grosvenor and Benton Resources in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Benton 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 Benton Resources. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Benton Resources has no effect on the direction of GCM Grosvenor i.e., GCM Grosvenor and Benton Resources go up and down completely randomly.
Pair Corralation between GCM Grosvenor and Benton Resources
Assuming the 90 days horizon GCM Grosvenor is expected to generate 1.27 times more return on investment than Benton Resources. However, GCM Grosvenor is 1.27 times more volatile than Benton Resources. It trades about 0.14 of its potential returns per unit of risk. Benton Resources is currently generating about 0.0 per unit of risk. If you would invest 31.00 in GCM Grosvenor on February 17, 2024 and sell it today you would earn a total of 21.75 from holding GCM Grosvenor or generate 70.16% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Weak |
Accuracy | 93.65% |
Values | Daily Returns |
GCM Grosvenor vs. Benton Resources
Performance |
Timeline |
GCM Grosvenor |
Benton Resources |
GCM Grosvenor and Benton Resources Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with GCM Grosvenor and Benton Resources
The main advantage of trading using opposite GCM Grosvenor and Benton Resources positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if GCM Grosvenor position performs unexpectedly, Benton 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 Benton Resources will offset losses from the drop in Benton Resources' long position.GCM Grosvenor vs. RLI Corp | GCM Grosvenor vs. Westamerica Bancorporation | GCM Grosvenor vs. Brown Brown | GCM Grosvenor vs. Jack Henry Associates |
Benton Resources vs. Puma Exploration | Benton Resources vs. Sixty North Gold | Benton Resources vs. Altamira Gold Corp | Benton Resources vs. Endurance Gold |
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 Idea Optimizer module to use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio .
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