Correlation Between GCM Grosvenor and Munivest Fund

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

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

Diversification Opportunities for GCM Grosvenor and Munivest Fund

-0.24

Correlation Coefficient

GCM Grosvenor  Munivest Fund

Very good diversification

The 3 months correlation between GCM and Munivest is -0.24. Overlapping area represents the amount of risk that can be diversified away by holding GCM Grosvenor and Munivest Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Munivest Fund 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 Munivest Fund. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Munivest Fund has no effect on the direction of GCM Grosvenor i.e., GCM Grosvenor and Munivest Fund go up and down completely randomly.

Pair Corralation between GCM Grosvenor and Munivest Fund

Given the investment horizon of 90 days GCM Grosvenor is expected to generate 2.14 times more return on investment than Munivest Fund. However, GCM Grosvenor is 2.14 times more volatile than Munivest Fund. It trades about 0.13 of its potential returns per unit of risk. Munivest Fund is currently generating about -0.08 per unit of risk. If you would invest  1,112  in GCM Grosvenor on September 15, 2024 and sell it today you would earn a total of  133.00  from holding GCM Grosvenor or generate 11.96% return on investment over 90 days.

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

GCM Grosvenor  vs.  Munivest Fund

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.

Munivest Fund

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Munivest Fund has generated negative risk-adjusted returns adding no value to fund investors. Despite nearly stable basic indicators, Munivest Fund is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

Pair Trading with GCM Grosvenor and Munivest Fund

The main advantage of trading using opposite GCM Grosvenor and Munivest Fund positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if GCM Grosvenor position performs unexpectedly, Munivest Fund 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 Munivest Fund will offset losses from the drop in Munivest Fund's long position.

The idea behind GCM Grosvenor and Munivest Fund 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.

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 Economic Indicators module to top statistical indicators that provide insights into how an economy is performing.