Correlation Between GCM Grosvenor and Carlyle

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

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

Diversification Opportunities for GCM Grosvenor and Carlyle

-0.6

Correlation Coefficient

GCM Grosvenor  Carlyle

Excellent diversification

The 3 months correlation between GCM and Carlyle is -0.6. Overlapping area represents the amount of risk that can be diversified away by holding GCM Grosvenor and Carlyle Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Carlyle Group 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 Carlyle. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Carlyle Group has no effect on the direction of GCM Grosvenor i.e., GCM Grosvenor and Carlyle go up and down completely randomly.

Pair Corralation between GCM Grosvenor and Carlyle

Assuming the 90 days horizon GCM Grosvenor is expected to generate 2.57 times more return on investment than Carlyle. However, GCM Grosvenor is 2.57 times more volatile than Carlyle Group. It trades about 0.17 of its potential returns per unit of risk. Carlyle Group is currently generating about -0.13 per unit of risk. If you would invest  43.00  in GCM Grosvenor on March 11, 2024 and sell it today you would earn a total of  17.00  from holding GCM Grosvenor or generate 39.53% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Weak
Accuracy	93.02%
Values	Daily Returns

GCM Grosvenor  vs.  Carlyle Group

GCM Grosvenor

Risk-Adjusted Performance

11 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in GCM Grosvenor are ranked lower than 11 (%) of all global equities and portfolios over the last 90 days. In spite of fairly inconsistent technical and fundamental indicators, GCM Grosvenor showed solid returns over the last few months and may actually be approaching a breakup point.

Carlyle Group

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Carlyle Group has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest inconsistent performance, the Stock's technical and fundamental indicators remain stable and the current disturbance on Wall Street may also be a sign of long-run gains for the company stockholders.

Pair Trading with GCM Grosvenor and Carlyle

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

The idea behind GCM Grosvenor and Carlyle Group 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 Headlines Timeline module to stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity.