Correlation Between Blackstone and Blackrock

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

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

Diversification Opportunities for Blackstone and Blackrock

0.37
  Correlation Coefficient
Blackstone Group
Blackrock

Weak diversification

The 3 months correlation between Blackstone and Blackrock is 0.37. Overlapping area represents the amount of risk that can be diversified away by holding The Blackstone Group and Blackrock in the same portfolio assuming nothing else is changed. The correlation between historical prices or returns on Blackrock 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 Blackrock. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Blackrock has no effect on the direction of Blackstone i.e., Blackstone and Blackrock go up and down completely randomly.

Pair Corralation between Blackstone and Blackrock

Allowing for the 90-day total investment horizon The Blackstone Group is expected to generate 1.09 times more return on investment than Blackrock. However, Blackstone is 1.09 times more volatile than Blackrock. It trades about 0.08 of its potential returns per unit of risk. Blackrock is currently generating about 0.08 per unit of risk. If you would invest  4,585  in The Blackstone Group on May 5, 2021 and sell it today you would earn a total of  6,931  from holding The Blackstone Group or generate 151.17% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthVery Weak
Accuracy99.8%
ValuesDaily Returns

The Blackstone Group  vs.  Blackrock

 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

Blackrock 
 Blackrock Performance
3 of 100
Compared to the overall equity markets, risk-adjusted returns on investments in Blackrock are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. Despite fairly strong essential indicators, Blackrock is not utilizing all of its potentials. The current stock price confusion, may contribute to short-horizon losses for the traders.

Blackrock Price Channel

Blackstone and Blackrock Volatility Contrast

 Predicted Return Density 
      Returns 

Pair Trading with Blackstone and Blackrock

The main advantage of trading using opposite Blackstone and Blackrock positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Blackstone position performs unexpectedly, Blackrock 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 Blackrock will offset losses from the drop in Blackrock's long position.
The idea behind The Blackstone Group and Blackrock 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 Equity Forecasting module to use basic forecasting models to generate price predictions and determine price momentum.

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