Correlation Between Blackstone and TINC Comm

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

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

Diversification Opportunities for Blackstone and TINC Comm

-0.92

Correlation Coefficient

Blackstone  TINC Comm

Pay attention - limited upside

The 3 months correlation between Blackstone and TINC is -0.92. Overlapping area represents the amount of risk that can be diversified away by holding Blackstone Group and TINC Comm VA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on TINC Comm VA 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 TINC Comm. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of TINC Comm VA has no effect on the direction of Blackstone i.e., Blackstone and TINC Comm go up and down completely randomly.

Pair Corralation between Blackstone and TINC Comm

Assuming the 90 days trading horizon Blackstone Group is expected to generate 2.2 times more return on investment than TINC Comm. However, Blackstone is 2.2 times more volatile than TINC Comm VA. It trades about 0.09 of its potential returns per unit of risk. TINC Comm VA is currently generating about -0.01 per unit of risk. If you would invest  6,737  in Blackstone Group on September 22, 2024 and sell it today you would earn a total of  9,751  from holding Blackstone Group or generate 144.74% return on investment over 90 days.

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

Blackstone Group  vs.  TINC Comm VA

Blackstone Group

Risk-Adjusted Performance

11 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Blackstone Group are ranked lower than 11 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, Blackstone reported solid returns over the last few months and may actually be approaching a breakup point.

TINC Comm VA

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days TINC Comm VA has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest fragile performance, the Stock's basic indicators remain stable and the current disturbance on Wall Street may also be a sign of long-run gains for the company stockholders.

Pair Trading with Blackstone and TINC Comm

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

The idea behind Blackstone Group and TINC Comm VA 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 Portfolio Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.