Correlation Between Blackstone and Brookfield Asset

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

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

Diversification Opportunities for Blackstone and Brookfield Asset

0.8
  Correlation Coefficient
Blackstone Group
Brookfield Asset Man

Very poor diversification

The 3 months correlation between Blackstone and Brookfield is 0.8. Overlapping area represents the amount of risk that can be diversified away by holding The Blackstone Group and Brookfield Asset Management in the same portfolio assuming nothing else is changed. The correlation between historical prices or returns on Brookfield Asset Man 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 The Blackstone Group are associated (or correlated) with Brookfield Asset. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Brookfield Asset Man has no effect on the direction of Blackstone i.e., Blackstone and Brookfield Asset go up and down completely randomly.

Pair Corralation between Blackstone and Brookfield Asset

If you would invest (100.00)  in Brookfield Asset Management on May 5, 2021 and sell it today you would earn a total of  100.00  from holding Brookfield Asset Management or generate -100.0% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthStrong
Accuracy100.0%
ValuesDaily Returns

The Blackstone Group  vs.  Brookfield Asset Management

 Performance (%) 
      Timeline 
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 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 and Brookfield Asset Volatility Contrast

 Predicted Return Density 
      Returns 

Pair Trading with Blackstone and Brookfield Asset

The main advantage of trading using opposite Blackstone and Brookfield Asset positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Blackstone position performs unexpectedly, Brookfield Asset 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 Brookfield Asset will offset losses from the drop in Brookfield Asset's long position.
The idea behind The Blackstone Group and Brookfield Asset Management 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 Money Flow Index module to determine momentum by analyzing Money Flow Index and other technical indicators.

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