Correlation Between GCM Grosvenor and Xp

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

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

Diversification Opportunities for GCM Grosvenor and Xp

-0.03

Correlation Coefficient

GCM Grosvenor  Xp

Good diversification

The 3 months correlation between GCM and Xp is -0.03. Overlapping area represents the amount of risk that can be diversified away by holding GCM Grosvenor and Xp Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Xp Inc 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 Xp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Xp Inc has no effect on the direction of GCM Grosvenor i.e., GCM Grosvenor and Xp go up and down completely randomly.

Pair Corralation between GCM Grosvenor and Xp

Assuming the 90 days horizon GCM Grosvenor is expected to under-perform the Xp. In addition to that, GCM Grosvenor is 4.04 times more volatile than Xp Inc. It trades about -0.11 of its total potential returns per unit of risk. Xp Inc is currently generating about 0.03 per unit of volatility. If you would invest  1,589  in Xp Inc on May 5, 2025 and sell it today you would earn a total of  47.00  from holding Xp Inc or generate 2.96% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	95.24%
Values	Daily Returns

GCM Grosvenor  vs.  Xp Inc

GCM Grosvenor

Risk-Adjusted Performance

Very Weak

Over the last 90 days GCM Grosvenor has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of abnormal performance in the last few months, the Stock's technical and fundamental indicators remain fairly stable which may send shares a bit higher in September 2025. The latest fuss may also be a sign of long-term up-swing for the venture sophisticated investors.

Xp Inc

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Xp Inc are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. Even with relatively invariable basic indicators, Xp is not utilizing all of its potentials. The newest stock price agitation, may contribute to short-term losses for the retail investors.

Pair Trading with GCM Grosvenor and Xp

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

The idea behind GCM Grosvenor and Xp Inc 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 Fundamentals Comparison module to compare fundamentals across multiple equities to find investing opportunities.