Correlation Between GCM Grosvenor and Alliancebernstein

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

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

Diversification Opportunities for GCM Grosvenor and Alliancebernstein

-0.35

Correlation Coefficient

GCM Grosvenor  Alliancebernstein

Very good diversification

The 3 months correlation between GCM and Alliancebernstein is -0.35. Overlapping area represents the amount of risk that can be diversified away by holding GCM Grosvenor and Alliancebernstein National Mun in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Alliancebernstein 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 Alliancebernstein. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Alliancebernstein has no effect on the direction of GCM Grosvenor i.e., GCM Grosvenor and Alliancebernstein go up and down completely randomly.

Pair Corralation between GCM Grosvenor and Alliancebernstein

Assuming the 90 days horizon GCM Grosvenor is expected to generate 12.63 times more return on investment than Alliancebernstein. However, GCM Grosvenor is 12.63 times more volatile than Alliancebernstein National Municipal. It trades about 0.13 of its potential returns per unit of risk. Alliancebernstein National Municipal is currently generating about -0.05 per unit of risk. If you would invest  83.00  in GCM Grosvenor on September 15, 2024 and sell it today you would earn a total of  43.00  from holding GCM Grosvenor or generate 51.81% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	93.75%
Values	Daily Returns

GCM Grosvenor  vs.  Alliancebernstein National Mun

GCM Grosvenor

Risk-Adjusted Performance

9 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in GCM Grosvenor are ranked lower than 9 (%) 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.

Alliancebernstein

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Alliancebernstein National Municipal has generated negative risk-adjusted returns adding no value to fund investors. Despite somewhat strong technical and fundamental indicators, Alliancebernstein is not utilizing all of its potentials. The latest stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with GCM Grosvenor and Alliancebernstein

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

The idea behind GCM Grosvenor and Alliancebernstein National Municipal 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 Price Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.