Correlation Between Blackstone and Bowen Acquisition

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

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

Diversification Opportunities for Blackstone and Bowen Acquisition

0.76

Correlation Coefficient

Blackstone  Bowen Acquisition

Poor diversification

The 3 months correlation between Blackstone and Bowen is 0.76. Overlapping area represents the amount of risk that can be diversified away by holding Blackstone Group and Bowen Acquisition Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bowen Acquisition Corp 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 Bowen Acquisition. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bowen Acquisition Corp has no effect on the direction of Blackstone i.e., Blackstone and Bowen Acquisition go up and down completely randomly.

Pair Corralation between Blackstone and Bowen Acquisition

Allowing for the 90-day total investment horizon Blackstone Group is expected to under-perform the Bowen Acquisition. In addition to that, Blackstone is 7.77 times more volatile than Bowen Acquisition Corp. It trades about -0.19 of its total potential returns per unit of risk. Bowen Acquisition Corp is currently generating about -0.04 per unit of volatility. If you would invest  1,096  in Bowen Acquisition Corp on October 9, 2024 and sell it today you would lose (2.00) from holding Bowen Acquisition Corp or give up 0.18% 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.  Bowen Acquisition Corp

Blackstone Group

Risk-Adjusted Performance

10 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Blackstone Group are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. In spite of fairly abnormal basic indicators, Blackstone showed solid returns over the last few months and may actually be approaching a breakup point.

Bowen Acquisition Corp

Risk-Adjusted Performance

9 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Bowen Acquisition Corp are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. In spite of very healthy basic indicators, Bowen Acquisition is not utilizing all of its potentials. The recent stock price disarray, may contribute to short-term losses for the investors.

Pair Trading with Blackstone and Bowen Acquisition

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

The idea behind Blackstone Group and Bowen Acquisition Corp 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.