Correlation Between GCM Grosvenor and CuriosityStream

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

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

Diversification Opportunities for GCM Grosvenor and CuriosityStream

0.41

Correlation Coefficient

GCM Grosvenor  CuriosityStream

Very weak diversification

The 3 months correlation between GCM and CuriosityStream is 0.41. Overlapping area represents the amount of risk that can be diversified away by holding GCM Grosvenor and CuriosityStream in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CuriosityStream 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 CuriosityStream. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CuriosityStream has no effect on the direction of GCM Grosvenor i.e., GCM Grosvenor and CuriosityStream go up and down completely randomly.

Pair Corralation between GCM Grosvenor and CuriosityStream

Assuming the 90 days horizon GCM Grosvenor is expected to generate 13.88 times less return on investment than CuriosityStream. But when comparing it to its historical volatility, GCM Grosvenor is 16.81 times less risky than CuriosityStream. It trades about 0.17 of its potential returns per unit of risk. CuriosityStream is currently generating about 0.14 of returns per unit of risk over similar time horizon. If you would invest  2.05  in CuriosityStream on September 2, 2024 and sell it today you would earn a total of  0.95  from holding CuriosityStream or generate 46.34% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	93.22%
Values	Daily Returns

GCM Grosvenor  vs.  CuriosityStream

GCM Grosvenor

Risk-Adjusted Performance

13 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in GCM Grosvenor are ranked lower than 13 (%) of all global equities and portfolios over the last 90 days. In spite of fairly abnormal technical and fundamental indicators, GCM Grosvenor showed solid returns over the last few months and may actually be approaching a breakup point.

CuriosityStream

Risk-Adjusted Performance

10 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in CuriosityStream are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. In spite of fairly abnormal forward indicators, CuriosityStream showed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with GCM Grosvenor and CuriosityStream

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

The idea behind GCM Grosvenor and CuriosityStream 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 Efficient Frontier module to plot and analyze your portfolio and positions against risk-return landscape of the market..