Correlation Between Blackstone and Corebridge Financial

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

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

Diversification Opportunities for Blackstone and Corebridge Financial

0.08

Correlation Coefficient

Blackstone  Corebridge Financial

Significant diversification

The 3 months correlation between Blackstone and Corebridge is 0.08. Overlapping area represents the amount of risk that can be diversified away by holding Blackstone Group and Corebridge Financial in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Corebridge Financial 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 Corebridge Financial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Corebridge Financial has no effect on the direction of Blackstone i.e., Blackstone and Corebridge Financial go up and down completely randomly.

Pair Corralation between Blackstone and Corebridge Financial

Allowing for the 90-day total investment horizon Blackstone Group is expected to under-perform the Corebridge Financial. But the stock apears to be less risky and, when comparing its historical volatility, Blackstone Group is 1.01 times less risky than Corebridge Financial. The stock trades about -0.1 of its potential returns per unit of risk. The Corebridge Financial is currently generating about 0.09 of returns per unit of risk over similar time horizon. If you would invest  3,001  in Corebridge Financial on December 25, 2024 and sell it today you would earn a total of  302.00  from holding Corebridge Financial or generate 10.06% 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.  Corebridge Financial

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.

Corebridge Financial

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Corebridge Financial are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. Despite nearly unfluctuating fundamental drivers, Corebridge Financial may actually be approaching a critical reversion point that can send shares even higher in April 2025.

Pair Trading with Blackstone and Corebridge Financial

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

The idea behind Blackstone Group and Corebridge Financial 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 Portfolio Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.