Correlation Between GCM Grosvenor and Bny Mellon

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

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

Diversification Opportunities for GCM Grosvenor and Bny Mellon

-0.07

Correlation Coefficient

GCM Grosvenor  Bny Mellon

Good diversification

The 3 months correlation between GCM and Bny is -0.07. Overlapping area represents the amount of risk that can be diversified away by holding GCM Grosvenor and Bny Mellon Municipalome in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bny Mellon Municipalome 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 Bny Mellon. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bny Mellon Municipalome has no effect on the direction of GCM Grosvenor i.e., GCM Grosvenor and Bny Mellon go up and down completely randomly.

Pair Corralation between GCM Grosvenor and Bny Mellon

Assuming the 90 days horizon GCM Grosvenor is expected to generate 12.82 times more return on investment than Bny Mellon. However, GCM Grosvenor is 12.82 times more volatile than Bny Mellon Municipalome. It trades about 0.09 of its potential returns per unit of risk. Bny Mellon Municipalome is currently generating about 0.06 per unit of risk. If you would invest  50.00  in GCM Grosvenor on December 2, 2024 and sell it today you would earn a total of  208.00  from holding GCM Grosvenor or generate 416.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	83.43%
Values	Daily Returns

GCM Grosvenor  vs.  Bny Mellon Municipalome

GCM Grosvenor

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in GCM Grosvenor are ranked lower than 16 (%) of all global equities and portfolios over the last 90 days. In spite of fairly fragile technical and fundamental indicators, GCM Grosvenor showed solid returns over the last few months and may actually be approaching a breakup point.

Bny Mellon Municipalome

Risk-Adjusted Performance

Very Weak

Over the last 90 days Bny Mellon Municipalome has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable primary indicators, Bny Mellon is not utilizing all of its potentials. The latest stock price disturbance, may contribute to mid-run losses for the stockholders.

Pair Trading with GCM Grosvenor and Bny Mellon

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

The idea behind GCM Grosvenor and Bny Mellon Municipalome 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 Sync Your Broker module to sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors..