Correlation Between BlackRock and Blue Owl

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

By analyzing existing cross correlation between BlackRock and Blue Owl Capital, you can compare the effects of market volatilities on BlackRock and Blue Owl 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 BlackRock with a short position of Blue Owl. Check out your portfolio center. Please also check ongoing floating volatility patterns of BlackRock and Blue Owl.

Diversification Opportunities for BlackRock and Blue Owl

0.87

Correlation Coefficient

BlackRock  Blue Owl

Very poor diversification

The 3 months correlation between BlackRock and Blue is 0.87. Overlapping area represents the amount of risk that can be diversified away by holding BlackRock and Blue Owl Capital in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Blue Owl Capital and BlackRock 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 BlackRock are associated (or correlated) with Blue Owl. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Blue Owl Capital has no effect on the direction of BlackRock i.e., BlackRock and Blue Owl go up and down completely randomly.

Pair Corralation between BlackRock and Blue Owl

Considering the 90-day investment horizon BlackRock is expected to generate 0.63 times more return on investment than Blue Owl. However, BlackRock is 1.58 times less risky than Blue Owl. It trades about -0.07 of its potential returns per unit of risk. Blue Owl Capital is currently generating about -0.07 per unit of risk. If you would invest  102,185  in BlackRock on December 28, 2024 and sell it today you would lose (7,515) from holding BlackRock or give up 7.35% of portfolio value over 90 days.

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

BlackRock  vs.  Blue Owl Capital

BlackRock

Risk-Adjusted Performance

Very Weak

Over the last 90 days BlackRock has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest weak performance, the Stock's essential indicators remain persistent and the latest mess on Wall Street may also be a sign of long-standing gains for the company institutional investors.

Blue Owl Capital

Risk-Adjusted Performance

Very Weak

Over the last 90 days Blue Owl Capital has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest unfluctuating performance, the Stock's basic indicators remain persistent and the latest mess on Wall Street may also be a sign of long-standing gains for the company institutional investors.

Pair Trading with BlackRock and Blue Owl

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

The idea behind BlackRock and Blue Owl Capital 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.

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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 Headlines Timeline module to stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity.