Correlation Between Blackstone and Brookfield Asset

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

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

Diversification Opportunities for Blackstone and Brookfield Asset

0.79

Correlation Coefficient

Blackstone  Brookfield Asset

Poor diversification

The 3 months correlation between Blackstone and Brookfield is 0.79. Overlapping area represents the amount of risk that can be diversified away by holding Blackstone Group and Brookfield Asset Management in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Brookfield Asset Man 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 Brookfield Asset. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Brookfield Asset Man has no effect on the direction of Blackstone i.e., Blackstone and Brookfield Asset go up and down completely randomly.

Pair Corralation between Blackstone and Brookfield Asset

Allowing for the 90-day total investment horizon Blackstone Group is expected to under-perform the Brookfield Asset. But the stock apears to be less risky and, when comparing its historical volatility, Blackstone Group is 1.11 times less risky than Brookfield Asset. The stock trades about -0.14 of its potential returns per unit of risk. The Brookfield Asset Management is currently generating about -0.06 of returns per unit of risk over similar time horizon. If you would invest  5,416  in Brookfield Asset Management on December 30, 2024 and sell it today you would lose (566.00) from holding Brookfield Asset Management or give up 10.45% of portfolio value over 90 days.

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

Blackstone Group  vs.  Brookfield Asset Management

Blackstone Group

Risk-Adjusted Performance

Very Weak

Over the last 90 days Blackstone Group has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of abnormal performance in the last few months, the Stock's basic indicators remain fairly strong which may send shares a bit higher in April 2025. The current disturbance may also be a sign of long term up-swing for the company investors.

Brookfield Asset Man

Risk-Adjusted Performance

Very Weak

Over the last 90 days Brookfield Asset Management has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest weak performance, the Stock's basic indicators remain healthy and the recent disarray on Wall Street may also be a sign of long period gains for the firm investors.

Pair Trading with Blackstone and Brookfield Asset

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

The idea behind Blackstone Group and Brookfield Asset Management 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 Top Crypto Exchanges module to search and analyze digital assets across top global cryptocurrency exchanges.