Correlation Between Blackstone and Financial

Can any of the company-specific risk be diversified away by investing in both Blackstone and 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 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 Financial 15 Split, you can compare the effects of market volatilities on Blackstone and 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 Financial. Check out your portfolio center. Please also check ongoing floating volatility patterns of Blackstone and Financial.

Diversification Opportunities for Blackstone and Financial

0.78

Correlation Coefficient

Blackstone  Financial

Poor diversification

The 3 months correlation between Blackstone and Financial is 0.78. Overlapping area represents the amount of risk that can be diversified away by holding Blackstone Group and Financial 15 Split in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Financial 15 Split 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 Financial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Financial 15 Split has no effect on the direction of Blackstone i.e., Blackstone and Financial go up and down completely randomly.

Pair Corralation between Blackstone and Financial

Allowing for the 90-day total investment horizon Blackstone Group is expected to under-perform the Financial. But the stock apears to be less risky and, when comparing its historical volatility, Blackstone Group is 1.09 times less risky than Financial. The stock trades about -0.14 of its potential returns per unit of risk. The Financial 15 Split is currently generating about -0.03 of returns per unit of risk over similar time horizon. If you would invest  642.00  in Financial 15 Split on December 30, 2024 and sell it today you would lose (35.00) from holding Financial 15 Split or give up 5.45% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	96.77%
Values	Daily Returns

Blackstone Group  vs.  Financial 15 Split

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.

Financial 15 Split

Risk-Adjusted Performance

Very Weak

Over the last 90 days Financial 15 Split has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable fundamental indicators, Financial is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

Pair Trading with Blackstone and Financial

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

The idea behind Blackstone Group and Financial 15 Split 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 Balance Of Power module to check stock momentum by analyzing Balance Of Power indicator and other technical ratios.