Correlation Between GCM Grosvenor and Stifel Financial

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

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

Diversification Opportunities for GCM Grosvenor and Stifel Financial

0.16

Correlation Coefficient

GCM Grosvenor  Stifel Financial

Average diversification

The 3 months correlation between GCM and Stifel is 0.16. Overlapping area represents the amount of risk that can be diversified away by holding GCM Grosvenor and Stifel Financial in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Stifel Financial 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 Stifel Financial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Stifel Financial has no effect on the direction of GCM Grosvenor i.e., GCM Grosvenor and Stifel Financial go up and down completely randomly.

Pair Corralation between GCM Grosvenor and Stifel Financial

Assuming the 90 days horizon GCM Grosvenor is expected to generate 4.66 times more return on investment than Stifel Financial. However, GCM Grosvenor is 4.66 times more volatile than Stifel Financial. It trades about 0.15 of its potential returns per unit of risk. Stifel Financial is currently generating about -0.05 per unit of risk. If you would invest  119.00  in GCM Grosvenor on December 27, 2024 and sell it today you would earn a total of  91.00  from holding GCM Grosvenor or generate 76.47% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	98.33%
Values	Daily Returns

GCM Grosvenor  vs.  Stifel Financial

GCM Grosvenor

Risk-Adjusted Performance

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 abnormal technical and fundamental indicators, GCM Grosvenor showed solid returns over the last few months and may actually be approaching a breakup point.

Stifel Financial

Risk-Adjusted Performance

Very Weak

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

Pair Trading with GCM Grosvenor and Stifel Financial

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

The idea behind GCM Grosvenor and Stifel Financial 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 Earnings Calls module to check upcoming earnings announcements updated hourly across public exchanges.