Correlation Between Eaton Vance and GCM Grosvenor

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

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

Diversification Opportunities for Eaton Vance and GCM Grosvenor

-0.29

Correlation Coefficient

Eaton Vance  GCM Grosvenor

Very good diversification

The 3 months correlation between Eaton and GCM is -0.29. Overlapping area represents the amount of risk that can be diversified away by holding Eaton Vance National and GCM Grosvenor in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on GCM Grosvenor and Eaton Vance 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 Eaton Vance National are associated (or correlated) with GCM Grosvenor. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of GCM Grosvenor has no effect on the direction of Eaton Vance i.e., Eaton Vance and GCM Grosvenor go up and down completely randomly.

Pair Corralation between Eaton Vance and GCM Grosvenor

Considering the 90-day investment horizon Eaton Vance is expected to generate 26.16 times less return on investment than GCM Grosvenor. But when comparing it to its historical volatility, Eaton Vance National is 3.09 times less risky than GCM Grosvenor. It trades about 0.02 of its potential returns per unit of risk. GCM Grosvenor is currently generating about 0.17 of returns per unit of risk over similar time horizon. If you would invest  1,071  in GCM Grosvenor on September 2, 2024 and sell it today you would earn a total of  170.00  from holding GCM Grosvenor or generate 15.87% return on investment over 90 days.

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

Eaton Vance National  vs.  GCM Grosvenor

Eaton Vance National

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Eaton Vance National are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively stable basic indicators, Eaton Vance is not utilizing all of its potentials. The latest stock price uproar, may contribute to short-horizon losses for the private investors.

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. Despite nearly inconsistent primary indicators, GCM Grosvenor reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Eaton Vance and GCM Grosvenor

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

The idea behind Eaton Vance National and GCM Grosvenor 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 Transaction History module to view history of all your transactions and understand their impact on performance.