Correlation Between Blackstone and Registered Plan

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

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

Diversification Opportunities for Blackstone and Registered Plan

0.02

Correlation Coefficient

Blackstone  Registered Plan

Significant diversification

The 3 months correlation between Blackstone and Registered is 0.02. Overlapping area represents the amount of risk that can be diversified away by holding Blackstone Group and Registered Plan Private in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Registered Plan Private 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 Registered Plan. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Registered Plan Private has no effect on the direction of Blackstone i.e., Blackstone and Registered Plan go up and down completely randomly.

Pair Corralation between Blackstone and Registered Plan

Allowing for the 90-day total investment horizon Blackstone is expected to generate 109.97 times less return on investment than Registered Plan. But when comparing it to its historical volatility, Blackstone Group is 110.7 times less risky than Registered Plan. It trades about 0.19 of its potential returns per unit of risk. Registered Plan Private is currently generating about 0.19 of returns per unit of risk over similar time horizon. If you would invest  0.01  in Registered Plan Private on February 16, 2024 and sell it today you would earn a total of  0.00  from holding Registered Plan Private or generate 0.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	95.65%
Values	Daily Returns

Blackstone Group  vs.  Registered Plan Private

Blackstone Group

Risk-Adjusted Performance

2 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Blackstone Group are ranked lower than 2 (%) 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 newest stock price disturbance, may contribute to short-term losses for the investors.

Registered Plan Private

Risk-Adjusted Performance

8 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Registered Plan Private are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, Registered Plan reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Blackstone and Registered Plan

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

The idea behind Blackstone Group and Registered Plan Private 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 the Balance Of Power module to check stock momentum by analyzing Balance Of Power indicator and other technical ratios.