Correlation Between GM and Blackstone
Can any of the company-specific risk be diversified away by investing in both GM and Blackstone 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 GM and Blackstone into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between General Motors and Blackstone Group, you can compare the effects of market volatilities on GM and Blackstone 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 GM with a short position of Blackstone. Check out your portfolio center. Please also check ongoing floating volatility patterns of GM and Blackstone.
Diversification Opportunities for GM and Blackstone
0.45 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between GM and Blackstone is 0.45. Overlapping area represents the amount of risk that can be diversified away by holding General Motors and Blackstone Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Blackstone Group and GM 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 General Motors are associated (or correlated) with Blackstone. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Blackstone Group has no effect on the direction of GM i.e., GM and Blackstone go up and down completely randomly.
Pair Corralation between GM and Blackstone
Allowing for the 90-day total investment horizon General Motors is expected to generate 0.79 times more return on investment than Blackstone. However, General Motors is 1.27 times less risky than Blackstone. It trades about 0.08 of its potential returns per unit of risk. Blackstone Group is currently generating about -0.07 per unit of risk. If you would invest 4,400 in General Motors on January 26, 2024 and sell it today you would earn a total of 108.00 from holding General Motors or generate 2.45% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
General Motors vs. Blackstone Group
Performance |
| Timeline |
| General Motors |
| Blackstone Group |
GM and Blackstone Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with GM and Blackstone
The main advantage of trading using opposite GM and Blackstone positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if GM position performs unexpectedly, Blackstone 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 Blackstone will offset losses from the drop in Blackstone's long position.The idea behind General Motors and Blackstone Group 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.| Blackstone vs. T Rowe Price | Blackstone vs. State Street Corp | Blackstone vs. KKR Co LP | Blackstone vs. Brookfield Asset Management |
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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.
Other Complementary Tools
| Idea Analyzer Analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas | |
| Money Managers Screen money managers from public funds and ETFs managed around the world | |
| Equity Search Search for actively traded equities including funds and ETFs from over 30 global markets | |
| Commodity Channel Use Commodity Channel Index to analyze current equity momentum | |
| Top Crypto Exchanges Search and analyze digital assets across top global cryptocurrency exchanges | |
| Insider Screener Find insiders across different sectors to evaluate their impact on performance | |
| Portfolio Holdings Check your current holdings and cash postion to detemine if your portfolio needs rebalancing | |
| Bollinger Bands Use Bollinger Bands indicator to analyze target price for a given investing horizon | |
| Transaction History View history of all your transactions and understand their impact on performance |