Correlation Between IShares Edge and Blackstone
Can any of the company-specific risk be diversified away by investing in both IShares Edge 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 IShares Edge and Blackstone into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between iShares Edge MSCI and Blackstone Group, you can compare the effects of market volatilities on IShares Edge 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 IShares Edge with a short position of Blackstone. Check out your portfolio center. Please also check ongoing floating volatility patterns of IShares Edge and Blackstone.
Diversification Opportunities for IShares Edge and Blackstone
0.5 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between IShares and Blackstone is 0.5. Overlapping area represents the amount of risk that can be diversified away by holding iShares Edge MSCI and Blackstone Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Blackstone Group and IShares Edge 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 iShares Edge MSCI 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 IShares Edge i.e., IShares Edge and Blackstone go up and down completely randomly.
Pair Corralation between IShares Edge and Blackstone
Given the investment horizon of 90 days iShares Edge MSCI is expected to generate 0.36 times more return on investment than Blackstone. However, iShares Edge MSCI is 2.78 times less risky than Blackstone. It trades about -0.08 of its potential returns per unit of risk. Blackstone Group is currently generating about -0.08 per unit of risk. If you would invest 2,954 in iShares Edge MSCI on January 25, 2024 and sell it today you would lose (36.00) from holding iShares Edge MSCI or give up 1.22% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
iShares Edge MSCI vs. Blackstone Group
Performance |
| Timeline |
| iShares Edge MSCI |
| Blackstone Group |
IShares Edge and Blackstone Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with IShares Edge and Blackstone
The main advantage of trading using opposite IShares Edge and Blackstone positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if IShares Edge 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.| IShares Edge vs. SPDR MSCI Emerging | IShares Edge vs. SPDR MSCI USA | IShares Edge vs. SPDR MSCI World | IShares Edge vs. SPDR SSGA Large |
| 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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.
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