Correlation Between Vanguard Health and Blackstone
Can any of the company-specific risk be diversified away by investing in both Vanguard Health 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 Vanguard Health and Blackstone into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Vanguard Health Care and Blackstone Group, you can compare the effects of market volatilities on Vanguard Health 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 Vanguard Health with a short position of Blackstone. Check out your portfolio center. Please also check ongoing floating volatility patterns of Vanguard Health and Blackstone.
Diversification Opportunities for Vanguard Health and Blackstone
0.63 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Vanguard and Blackstone is 0.63. Overlapping area represents the amount of risk that can be diversified away by holding Vanguard Health Care and Blackstone Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Blackstone Group and Vanguard Health 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 Vanguard Health Care 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 Vanguard Health i.e., Vanguard Health and Blackstone go up and down completely randomly.
Pair Corralation between Vanguard Health and Blackstone
Considering the 90-day investment horizon Vanguard Health is expected to generate 3.29 times less return on investment than Blackstone. But when comparing it to its historical volatility, Vanguard Health Care is 2.77 times less risky than Blackstone. It trades about 0.03 of its potential returns per unit of risk. Blackstone Group is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest 9,513 in Blackstone Group on January 26, 2024 and sell it today you would earn a total of 2,865 from holding Blackstone Group or generate 30.12% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 99.6% |
| Values | Daily Returns |
Vanguard Health Care vs. Blackstone Group
Performance |
| Timeline |
| Vanguard Health Care |
| Blackstone Group |
Vanguard Health and Blackstone Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Vanguard Health and Blackstone
The main advantage of trading using opposite Vanguard Health and Blackstone positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Vanguard Health 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.| Vanguard Health vs. iShares Insurance ETF | Vanguard Health vs. SCOR PK | Vanguard Health vs. Morningstar Unconstrained Allocation | Vanguard Health vs. SPACE |
| Blackstone vs. Federated Premier Municipal | Blackstone vs. Blackrock Muniyield | Blackstone vs. NXG NextGen Infrastructure | Blackstone vs. Brightsphere Investment Group |
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 Idea Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.
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