Correlation Between Blackstone and Gabelli Utility

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

Diversification Opportunities for Blackstone and Gabelli Utility

-0.24

Correlation Coefficient

Blackstone  Gabelli Utility

Very good diversification

The 3 months correlation between Blackstone and Gabelli is -0.24. Overlapping area represents the amount of risk that can be diversified away by holding Blackstone Group and The Gabelli Utility in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Gabelli Utility 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 Utility. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Gabelli Utility has no effect on the direction of Blackstone i.e., Blackstone and Gabelli Utility go up and down completely randomly.

Pair Corralation between Blackstone and Gabelli Utility

Allowing for the 90-day total investment horizon Blackstone Group is expected to generate 2.13 times more return on investment than Gabelli Utility. However, Blackstone is 2.13 times more volatile than The Gabelli Utility. It trades about 0.08 of its potential returns per unit of risk. The Gabelli Utility is currently generating about 0.04 per unit of risk. If you would invest  10,971  in Blackstone Group on October 4, 2024 and sell it today you would earn a total of  6,404  from holding Blackstone Group or generate 58.37% 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 Utility

Blackstone Group

Risk-Adjusted Performance

9 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Blackstone Group are ranked lower than 9 (%) 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 Utility

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days The Gabelli Utility has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of rather sound basic indicators, Gabelli Utility is not utilizing all of its potentials. The recent stock price tumult, may contribute to shorter-term losses for the shareholders.

Pair Trading with Blackstone and Gabelli Utility

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

The idea behind Blackstone Group and The Gabelli Utility 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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.