Correlation Between Blackstone and Gabelli Equity

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

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

Diversification Opportunities for Blackstone and Gabelli Equity

-0.27

Correlation Coefficient

Blackstone  Gabelli Equity

Very good diversification

The 3 months correlation between Blackstone and Gabelli is -0.27. Overlapping area represents the amount of risk that can be diversified away by holding Blackstone Group and The Gabelli Equity in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Gabelli Equity 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 Gabelli Equity. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Gabelli Equity has no effect on the direction of Blackstone i.e., Blackstone and Gabelli Equity go up and down completely randomly.

Pair Corralation between Blackstone and Gabelli Equity

Allowing for the 90-day total investment horizon Blackstone Group is expected to generate 2.03 times more return on investment than Gabelli Equity. However, Blackstone is 2.03 times more volatile than The Gabelli Equity. It trades about 0.09 of its potential returns per unit of risk. The Gabelli Equity is currently generating about 0.02 per unit of risk. If you would invest  8,086  in Blackstone Group on October 5, 2024 and sell it today you would earn a total of  9,289  from holding Blackstone Group or generate 114.88% return on investment over 90 days.

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

Blackstone Group  vs.  The Gabelli Equity

Blackstone Group

Risk-Adjusted Performance

11 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Blackstone Group are ranked lower than 11 (%) 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.

Gabelli Equity

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days The Gabelli Equity has generated negative risk-adjusted returns adding no value to investors with long positions. Despite quite persistent fundamental drivers, Gabelli Equity is not utilizing all of its potentials. The current stock price mess, may contribute to short-term losses for the institutional investors.

Pair Trading with Blackstone and Gabelli Equity

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

The idea behind Blackstone Group and The Gabelli Equity 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 FinTech Suite module to use AI to screen and filter profitable investment opportunities.