Correlation Between GCM Grosvenor and Cipher Mining

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Can any of the company-specific risk be diversified away by investing in both GCM Grosvenor and Cipher Mining 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 Cipher Mining into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between GCM Grosvenor and Cipher Mining, you can compare the effects of market volatilities on GCM Grosvenor and Cipher Mining 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 Cipher Mining. Check out your portfolio center. Please also check ongoing floating volatility patterns of GCM Grosvenor and Cipher Mining.

Diversification Opportunities for GCM Grosvenor and Cipher Mining

GCMCipherDiversified AwayGCMCipherDiversified Away100%
-0.34
  Correlation Coefficient

Very good diversification

The 3 months correlation between GCM and Cipher is -0.34. Overlapping area represents the amount of risk that can be diversified away by holding GCM Grosvenor and Cipher Mining in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cipher Mining 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 Cipher Mining. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Cipher Mining has no effect on the direction of GCM Grosvenor i.e., GCM Grosvenor and Cipher Mining go up and down completely randomly.

Pair Corralation between GCM Grosvenor and Cipher Mining

Given the investment horizon of 90 days GCM Grosvenor is expected to generate 1.11 times less return on investment than Cipher Mining. But when comparing it to its historical volatility, GCM Grosvenor is 6.13 times less risky than Cipher Mining. It trades about 0.2 of its potential returns per unit of risk. Cipher Mining is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest  551.00  in Cipher Mining on November 23, 2024 and sell it today you would lose (2.00) from holding Cipher Mining or give up 0.36% of portfolio value over 90 days.
Time Period3 Months [change]
DirectionMoves Against 
StrengthInsignificant
Accuracy100.0%
ValuesDaily Returns

GCM Grosvenor  vs.  Cipher Mining

 Performance 
JavaScript chart by amCharts 3.21.15Dec2025Feb -30-20-1001020
JavaScript chart by amCharts 3.21.15GCMG CIFR
       Timeline  
GCM Grosvenor 

Risk-Adjusted Performance

Solid

 
Weak
 
Strong
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.
JavaScript chart by amCharts 3.21.15DecJanFebJanFeb1212.51313.51414.5
Cipher Mining 

Risk-Adjusted Performance

Very Weak

 
Weak
 
Strong
Over the last 90 days Cipher Mining has generated negative risk-adjusted returns adding no value to investors with long positions. Even with relatively invariable technical and fundamental indicators, Cipher Mining is not utilizing all of its potentials. The recent stock price agitation, may contribute to short-term losses for the retail investors.
JavaScript chart by amCharts 3.21.15DecJanFebJanFeb4.555.566.577.5

GCM Grosvenor and Cipher Mining Volatility Contrast

   Predicted Return Density   
JavaScript chart by amCharts 3.21.15-3.89-2.92-1.94-0.960.01861.112.233.344.45 0.050.100.150.20
JavaScript chart by amCharts 3.21.15GCMG CIFR
       Returns  

Pair Trading with GCM Grosvenor and Cipher Mining

The main advantage of trading using opposite GCM Grosvenor and Cipher Mining positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if GCM Grosvenor position performs unexpectedly, Cipher Mining 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 Cipher Mining will offset losses from the drop in Cipher Mining's long position.
The idea behind GCM Grosvenor and Cipher Mining 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 Efficient Frontier module to plot and analyze your portfolio and positions against risk-return landscape of the market..

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