Correlation Between Blackstone and Mastercard
Can any of the company-specific risk be diversified away by investing in both Blackstone and Mastercard 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 Blackstone and Mastercard into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Blackstone Group and Mastercard, you can compare the effects of market volatilities on Blackstone and Mastercard 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 Blackstone with a short position of Mastercard. Check out your portfolio center. Please also check ongoing floating volatility patterns of Blackstone and Mastercard.
Diversification Opportunities for Blackstone and Mastercard
0.72 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Blackstone and Mastercard is 0.72. Overlapping area represents the amount of risk that can be diversified away by holding Blackstone Group and Mastercard in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mastercard and Blackstone 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 Blackstone Group are associated (or correlated) with Mastercard. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Mastercard has no effect on the direction of Blackstone i.e., Blackstone and Mastercard go up and down completely randomly.
Pair Corralation between Blackstone and Mastercard
Allowing for the 90-day total investment horizon Blackstone Group is expected to generate 2.47 times more return on investment than Mastercard. However, Blackstone is 2.47 times more volatile than Mastercard. It trades about -0.13 of its potential returns per unit of risk. Mastercard is currently generating about -0.4 per unit of risk. If you would invest 12,776 in Blackstone Group on January 20, 2024 and sell it today you would lose (744.00) from holding Blackstone Group or give up 5.82% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Blackstone Group vs. Mastercard
Performance |
| Timeline |
| Blackstone Group |
| Mastercard |
Blackstone and Mastercard Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Blackstone and Mastercard
The main advantage of trading using opposite Blackstone and Mastercard positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Blackstone position performs unexpectedly, Mastercard 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 Mastercard will offset losses from the drop in Mastercard's long position.| Blackstone vs. Swiftmerge Acquisition Corp | Blackstone vs. Four Leaf Acquisition | Blackstone vs. IX Acquisition Corp | Blackstone vs. Project Energy Reimagined |
| Mastercard vs. American Express | Mastercard vs. Capital One Financial | Mastercard vs. Upstart HoldingsInc | Mastercard vs. Ally Financial |
Check out your portfolio center.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 Price Ceiling Movement module to calculate and plot Price Ceiling Movement for different equity instruments.
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