Correlation Between Blackstone and Alchemy Investments

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

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

Diversification Opportunities for Blackstone and Alchemy Investments

0.15

Correlation Coefficient

Blackstone  Alchemy Investments

Average diversification

The 3 months correlation between Blackstone and Alchemy is 0.15. Overlapping area represents the amount of risk that can be diversified away by holding Blackstone Group and Alchemy Investments Acquisitio in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Alchemy Investments 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 Alchemy Investments. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Alchemy Investments has no effect on the direction of Blackstone i.e., Blackstone and Alchemy Investments go up and down completely randomly.

Pair Corralation between Blackstone and Alchemy Investments

Allowing for the 90-day total investment horizon Blackstone Group is expected to generate 1.16 times more return on investment than Alchemy Investments. However, Blackstone is 1.16 times more volatile than Alchemy Investments Acquisition. It trades about 0.1 of its potential returns per unit of risk. Alchemy Investments Acquisition is currently generating about 0.01 per unit of risk. If you would invest  16,664  in Blackstone Group on October 25, 2024 and sell it today you would earn a total of  1,888  from holding Blackstone Group or generate 11.33% return on investment over 90 days.

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

Blackstone Group  vs.  Alchemy Investments Acquisitio

Blackstone Group

Risk-Adjusted Performance

8 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Blackstone Group are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. In spite of fairly inconsistent basic indicators, Blackstone may actually be approaching a critical reversion point that can send shares even higher in February 2025.

Alchemy Investments

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Alchemy Investments Acquisition has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable basic indicators, Alchemy Investments is not utilizing all of its potentials. The newest stock price uproar, may contribute to short-horizon losses for the private investors.

Pair Trading with Blackstone and Alchemy Investments

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

The idea behind Blackstone Group and Alchemy Investments Acquisition 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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.