Correlation Between HE Equipment and Blackstone
Can any of the company-specific risk be diversified away by investing in both HE Equipment 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 HE Equipment and Blackstone into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between HE Equipment Services and Blackstone Group, you can compare the effects of market volatilities on HE Equipment 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 HE Equipment with a short position of Blackstone. Check out your portfolio center. Please also check ongoing floating volatility patterns of HE Equipment and Blackstone.
Diversification Opportunities for HE Equipment and Blackstone
0.52 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between HEES and Blackstone is 0.52. Overlapping area represents the amount of risk that can be diversified away by holding HE Equipment Services and Blackstone Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Blackstone Group and HE Equipment 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 HE Equipment Services 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 HE Equipment i.e., HE Equipment and Blackstone go up and down completely randomly.
Pair Corralation between HE Equipment and Blackstone
Given the investment horizon of 90 days HE Equipment Services is expected to under-perform the Blackstone. But the stock apears to be less risky and, when comparing its historical volatility, HE Equipment Services is 1.03 times less risky than Blackstone. The stock trades about -0.17 of its potential returns per unit of risk. The Blackstone Group is currently generating about -0.07 of returns per unit of risk over similar time horizon. If you would invest 12,788 in Blackstone Group on January 26, 2024 and sell it today you would lose (410.00) from holding Blackstone Group or give up 3.21% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
HE Equipment Services vs. Blackstone Group
Performance |
| Timeline |
| HE Equipment Services |
| Blackstone Group |
HE Equipment and Blackstone Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with HE Equipment and Blackstone
The main advantage of trading using opposite HE Equipment and Blackstone positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if HE Equipment 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.| HE Equipment vs. Ryder System | HE Equipment vs. The Aarons | HE Equipment vs. Alta Equipment Group | HE Equipment vs. GATX Corporation |
| 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 Bollinger Bands module to use Bollinger Bands indicator to analyze target price for a given investing horizon.
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