Correlation Between NVIDIA and Blackstone
Can any of the company-specific risk be diversified away by investing in both NVIDIA 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 NVIDIA and Blackstone into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between NVIDIA and Blackstone Group, you can compare the effects of market volatilities on NVIDIA 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 NVIDIA with a short position of Blackstone. Check out your portfolio center. Please also check ongoing floating volatility patterns of NVIDIA and Blackstone.
Diversification Opportunities for NVIDIA and Blackstone
0.53 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between NVIDIA and Blackstone is 0.53. Overlapping area represents the amount of risk that can be diversified away by holding NVIDIA and Blackstone Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Blackstone Group and NVIDIA 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 NVIDIA 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 NVIDIA i.e., NVIDIA and Blackstone go up and down completely randomly.
Pair Corralation between NVIDIA and Blackstone
Given the investment horizon of 90 days NVIDIA is expected to under-perform the Blackstone. In addition to that, NVIDIA is 1.5 times more volatile than Blackstone Group. It trades about -0.24 of its total potential returns per unit of risk. Blackstone Group is currently generating about -0.16 per unit of volatility. If you would invest 12,776 in Blackstone Group on January 20, 2024 and sell it today you would lose (936.00) from holding Blackstone Group or give up 7.33% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
NVIDIA vs. Blackstone Group
Performance |
| Timeline |
| NVIDIA |
| Blackstone Group |
NVIDIA and Blackstone Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with NVIDIA and Blackstone
The main advantage of trading using opposite NVIDIA and Blackstone positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if NVIDIA 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.| NVIDIA vs. Intel | NVIDIA vs. Taiwan Semiconductor Manufacturing | NVIDIA vs. Marvell Technology Group | NVIDIA vs. Micron Technology |
| 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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