Correlation Between GCM Grosvenor and Elevation Oncology

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

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

Diversification Opportunities for GCM Grosvenor and Elevation Oncology

-0.48

Correlation Coefficient

GCM Grosvenor  Elevation Oncology

Very good diversification

The 3 months correlation between GCM and Elevation is -0.48. Overlapping area represents the amount of risk that can be diversified away by holding GCM Grosvenor and Elevation Oncology in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Elevation Oncology 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 Elevation Oncology. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Elevation Oncology has no effect on the direction of GCM Grosvenor i.e., GCM Grosvenor and Elevation Oncology go up and down completely randomly.

Pair Corralation between GCM Grosvenor and Elevation Oncology

Given the investment horizon of 90 days GCM Grosvenor is expected to generate 2.39 times less return on investment than Elevation Oncology. But when comparing it to its historical volatility, GCM Grosvenor is 2.2 times less risky than Elevation Oncology. It trades about 0.12 of its potential returns per unit of risk. Elevation Oncology is currently generating about 0.13 of returns per unit of risk over similar time horizon. If you would invest  370.00  in Elevation Oncology on March 4, 2024 and sell it today you would earn a total of  32.00  from holding Elevation Oncology or generate 8.65% return on investment over 90 days.

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

GCM Grosvenor  vs.  Elevation Oncology

GCM Grosvenor

Risk-Adjusted Performance

16 of 100

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

Elevation Oncology

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Elevation Oncology has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest weak performance, the Stock's technical and fundamental indicators remain stable and the latest fuss on Wall Street may also be a sign of long-term gains for the venture sophisticated investors.

Pair Trading with GCM Grosvenor and Elevation Oncology

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

The idea behind GCM Grosvenor and Elevation Oncology 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 Premium Stories module to follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope.