Correlation Between Blackstone and Affiliated Managers

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

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

Diversification Opportunities for Blackstone and Affiliated Managers

-0.28

Correlation Coefficient

Blackstone  Affiliated Managers

Very good diversification

The 3 months correlation between Blackstone and Affiliated is -0.28. Overlapping area represents the amount of risk that can be diversified away by holding Blackstone Group and Affiliated Managers Group, in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Affiliated Managers 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 Affiliated Managers. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Affiliated Managers has no effect on the direction of Blackstone i.e., Blackstone and Affiliated Managers go up and down completely randomly.

Pair Corralation between Blackstone and Affiliated Managers

Allowing for the 90-day total investment horizon Blackstone Group is expected to generate 4.36 times more return on investment than Affiliated Managers. However, Blackstone is 4.36 times more volatile than Affiliated Managers Group,. It trades about 0.31 of its potential returns per unit of risk. Affiliated Managers Group, is currently generating about 0.04 per unit of risk. If you would invest  13,743  in Blackstone Group on September 3, 2024 and sell it today you would earn a total of  5,366  from holding Blackstone Group or generate 39.05% 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.  Affiliated Managers Group,

Blackstone Group

Risk-Adjusted Performance

24 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Blackstone Group are ranked lower than 24 (%) 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.

Affiliated Managers

Risk-Adjusted Performance

3 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Affiliated Managers Group, are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. In spite of rather sound basic indicators, Affiliated Managers 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 Affiliated Managers

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

The idea behind Blackstone Group and Affiliated Managers Group, 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 Crypto Correlations module to use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins.