Correlation Between Blackstone and Tekla Life

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

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

Diversification Opportunities for Blackstone and Tekla Life

0.4

Correlation Coefficient

Blackstone  Tekla Life

Very weak diversification

The 3 months correlation between Blackstone and Tekla is 0.4. Overlapping area represents the amount of risk that can be diversified away by holding Blackstone Group and Tekla Life Sciences in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Tekla Life Sciences 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 Tekla Life. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Tekla Life Sciences has no effect on the direction of Blackstone i.e., Blackstone and Tekla Life go up and down completely randomly.

Pair Corralation between Blackstone and Tekla Life

Allowing for the 90-day total investment horizon Blackstone Group is expected to under-perform the Tekla Life. In addition to that, Blackstone is 2.09 times more volatile than Tekla Life Sciences. It trades about -0.12 of its total potential returns per unit of risk. Tekla Life Sciences is currently generating about 0.03 per unit of volatility. If you would invest  1,271  in Tekla Life Sciences on December 29, 2024 and sell it today you would earn a total of  17.00  from holding Tekla Life Sciences or generate 1.34% return on investment over 90 days.

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

Blackstone Group  vs.  Tekla Life Sciences

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.

Tekla Life Sciences

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Tekla Life Sciences are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. Despite quite persistent basic indicators, Tekla Life is not utilizing all of its potentials. The latest stock price mess, may contribute to short-term losses for the institutional investors.

Pair Trading with Blackstone and Tekla Life

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

The idea behind Blackstone Group and Tekla Life Sciences 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 Alpha Finder module to use alpha and beta coefficients to find investment opportunities after accounting for the risk.