Pivotal Point of View – January 2021



  • A note on the GameStop in the room – the effects that this highly publicized, recent short squeeze may have on investor behavior and regulation remain unclear. However, what is clear is the considerable level of misinformation in the public sphere about the hedge fund industry. At PivotalPath, we believe that robust data and quality information ground this discourse, which is why it’s imperative to publish clear, verifiable insights on a regular basis. The Pivotal Point of View is one such example and we thank you for reading it. As always, please contact us with questions – to learn more about our suite of apps empowering allocators and managers, contact inquiry@pivotalpath.com.

  • On January 29th, the Institute for Private Capital (IPC) at UNC Kenan-Flagler announced its formal selection of PivotalPath as a dedicated research partner. This partnership will allow academic researchers to access data with “the transparency, the precision, and the depth that is necessary for high-quality research.”

  • On an ongoing basis, we methodically track and analyze pairwise correlations for 200+ global risk factors as a measure of systemic risk. January 2021 marks the all-time high for this indicator since its inception in 2000. The two previous highs occurred during March 2020 and the Global Financial Crisis.

  • In 2019, average pairwise correlations crept up from a prolonged period of depressed values. At that time, CEO Jon Caplis noted in Institutional Investor that “normally differentiated strategies may be loading up on the same risks, even if their approach remains unique….diversification is harder to come by, and even the best security selection may not yield the expected results.” Today, we are at nearly 2x the average pairwise correlation level than we were then.



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