Correlation Between Blackstone and AllianceBernstein

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

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

Diversification Opportunities for Blackstone and AllianceBernstein

0.44

Correlation Coefficient

Blackstone  AllianceBernstein

Very weak diversification

The 3 months correlation between Blackstone and AllianceBernstein is 0.44. Overlapping area represents the amount of risk that can be diversified away by holding Blackstone Group and AllianceBernstein Holding LP in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AllianceBernstein and Blackstone 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 Blackstone Group are associated (or correlated) with AllianceBernstein. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of AllianceBernstein has no effect on the direction of Blackstone i.e., Blackstone and AllianceBernstein go up and down completely randomly.

Pair Corralation between Blackstone and AllianceBernstein

Allowing for the 90-day total investment horizon Blackstone Group is expected to under-perform the AllianceBernstein. In addition to that, Blackstone is 1.41 times more volatile than AllianceBernstein Holding LP. It trades about -0.08 of its total potential returns per unit of risk. AllianceBernstein Holding LP is currently generating about -0.02 per unit of volatility. If you would invest  3,376  in AllianceBernstein Holding LP on January 25, 2024 and sell it today you would lose (26.00) from holding AllianceBernstein Holding LP or give up 0.77% of portfolio value over 90 days.

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

Blackstone Group  vs.  AllianceBernstein Holding LP

Blackstone Group

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Blackstone Group are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. 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.

AllianceBernstein

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in AllianceBernstein Holding LP are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. Despite somewhat strong fundamental drivers, AllianceBernstein is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Blackstone and AllianceBernstein

The main advantage of trading using opposite Blackstone and AllianceBernstein positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Blackstone position performs unexpectedly, AllianceBernstein 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 AllianceBernstein will offset losses from the drop in AllianceBernstein's long position.

The idea behind Blackstone Group and AllianceBernstein Holding LP 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 Commodity Channel module to use Commodity Channel Index to analyze current equity momentum.