Correlation Between Brookfield Asset and Blackstone
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.
By analyzing existing cross correlation between Brookfield Asset Management and 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.
Diversification Opportunities for Brookfield Asset and Blackstone
0.73 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Brookfield and Blackstone is 0.73. Overlapping area represents the amount of risk that can be diversified away by holding Brookfield Asset Management and 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 Management is expected to under-perform the Blackstone. But the stock apears to be less risky and, when comparing its historical volatility, Brookfield Asset Management is 1.33 times less risky than Blackstone. The stock trades about -0.25 of its potential returns per unit of risk. The Blackstone Group is currently generating about -0.13 of returns per unit of risk over similar time horizon. If you would invest 12,776 in Blackstone Group on January 20, 2024 and sell it today you would lose (744.00) from holding Blackstone Group or give up 5.82% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Brookfield Asset Management vs. Blackstone Group
Performance |
| Timeline |
| Brookfield Asset Man |
| Blackstone Group |
Brookfield Asset and Blackstone Volatility Contrast
Predicted Return Density |
| Returns |
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.| Brookfield Asset vs. KKR Co LP | Brookfield Asset vs. Blackstone Group | Brookfield Asset vs. Apollo Global Management | Brookfield Asset vs. T Rowe Price |
| Blackstone vs. T Rowe Price | Blackstone vs. State Street Corp | Blackstone vs. KKR Co LP | Blackstone vs. Brookfield Asset Management |
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 the Portfolio Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.
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