Correlation Between Brookfield Asset and Blackstone

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

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

Diversification Opportunities for Brookfield Asset and Blackstone

  Correlation Coefficient
Brookfield Asset Man
Blackstone Group

Very poor diversification

The 3 months correlation between Brookfield and Blackstone is 0.8. Overlapping area represents the amount of risk that can be diversified away by holding Brookfield Asset Management and The Blackstone Group in the same portfolio assuming nothing else is changed. The correlation between historical prices or returns on Blackstone Group and Brookfield Asset 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 Brookfield Asset Management 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 Brookfield Asset i.e., Brookfield Asset and Blackstone go up and down completely randomly.

Pair Corralation between Brookfield Asset and Blackstone

Considering the 90-day investment horizon Brookfield Asset is expected to generate 1.56 times less return on investment than Blackstone. In addition to that, Brookfield Asset is 1.02 times more volatile than The Blackstone Group. It trades about 0.05 of its total potential returns per unit of risk. The Blackstone Group is currently generating about 0.07 per unit of volatility. If you would invest  5,355  in The Blackstone Group on May 5, 2021 and sell it today you would earn a total of  6,161  from holding The Blackstone Group or generate 115.05% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
ValuesDaily Returns

Brookfield Asset Management  vs.  The Blackstone Group

 Performance (%) 
Brookfield Asset Man 
 Brookfield Performance
14 of 100
Compared to the overall equity markets, risk-adjusted returns on investments in Brookfield Asset Management are ranked lower than 14 (%) of all global equities and portfolios over the last 90 days. Even with relatively sluggish basic indicators, Brookfield Asset revealed solid returns over the last few months and may actually be approaching a breakup point.

Brookfield Price Channel

Blackstone Group 
 Blackstone Performance
21 of 100
Compared to the overall equity markets, risk-adjusted returns on investments in The Blackstone Group are ranked lower than 21 (%) of all global equities and portfolios over the last 90 days. In spite of fairly weak basic indicators, Blackstone showed solid returns over the last few months and may actually be approaching a breakup point.

Blackstone Price Channel

Brookfield Asset and Blackstone Volatility Contrast

 Predicted Return Density 

Pair Trading with Brookfield Asset and Blackstone

The main advantage of trading using opposite Brookfield Asset and Blackstone positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Brookfield Asset 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 Brookfield Asset Management and The 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.
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 Price Ceiling Movement module to calculate and plot Price Ceiling Movement for different equity instruments.

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