Correlation Between Victory Capital and Blackstone

Can any of the company-specific risk be diversified away by investing in both Victory Capital 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 Victory Capital and Blackstone into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Victory Capital Holdings and Blackstone Group, you can compare the effects of market volatilities on Victory Capital 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 Victory Capital with a short position of Blackstone. Check out your portfolio center. Please also check ongoing floating volatility patterns of Victory Capital and Blackstone.

Diversification Opportunities for Victory Capital and Blackstone

-0.44

Correlation Coefficient

Victory Capital  Blackstone

Very good diversification

The 3 months correlation between Victory and Blackstone is -0.44. Overlapping area represents the amount of risk that can be diversified away by holding Victory Capital Holdings and Blackstone Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Blackstone Group and Victory Capital 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 Victory Capital Holdings 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 Victory Capital i.e., Victory Capital and Blackstone go up and down completely randomly.

Pair Corralation between Victory Capital and Blackstone

Given the investment horizon of 90 days Victory Capital Holdings is expected to generate 0.91 times more return on investment than Blackstone. However, Victory Capital Holdings is 1.1 times less risky than Blackstone. It trades about 0.35 of its potential returns per unit of risk. Blackstone Group is currently generating about 0.01 per unit of risk. If you would invest  3,634  in Victory Capital Holdings on February 18, 2024 and sell it today you would earn a total of  1,535  from holding Victory Capital Holdings or generate 42.24% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	100.0%
Values	Daily Returns

Victory Capital Holdings  vs.  Blackstone Group

Victory Capital Holdings

Risk-Adjusted Performance

27 of 100

Strong

Compared to the overall equity markets, risk-adjusted returns on investments in Victory Capital Holdings are ranked lower than 27 (%) of all global equities and portfolios over the last 90 days. Even with relatively unfluctuating basic indicators, Victory Capital reported solid returns over the last few months and may actually be approaching a breakup point.

Blackstone Group

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Blackstone Group has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly strong basic indicators, Blackstone is not utilizing all of its potentials. The latest stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Victory Capital and Blackstone

The main advantage of trading using opposite Victory Capital and Blackstone positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Victory Capital 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 Victory Capital Holdings 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.

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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 Portfolio Dashboard module to portfolio dashboard that provides centralized access to all your investments.