Correlation Between Blackstone and PGIM Short

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

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

Diversification Opportunities for Blackstone and PGIM Short

-0.39

Correlation Coefficient

Blackstone  PGIM Short

Very good diversification

The 3 months correlation between Blackstone and PGIM is -0.39. Overlapping area represents the amount of risk that can be diversified away by holding Blackstone Group and PGIM Short Duration in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on PGIM Short Duration 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 PGIM Short. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of PGIM Short Duration has no effect on the direction of Blackstone i.e., Blackstone and PGIM Short go up and down completely randomly.

Pair Corralation between Blackstone and PGIM Short

Allowing for the 90-day total investment horizon Blackstone Group is expected to under-perform the PGIM Short. In addition to that, Blackstone is 5.81 times more volatile than PGIM Short Duration. It trades about -0.15 of its total potential returns per unit of risk. PGIM Short Duration is currently generating about 0.17 per unit of volatility. If you would invest  1,585  in PGIM Short Duration on December 28, 2024 and sell it today you would earn a total of  63.00  from holding PGIM Short Duration or generate 3.97% 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.  PGIM Short Duration

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.

PGIM Short Duration

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in PGIM Short Duration are ranked lower than 13 (%) of all global equities and portfolios over the last 90 days. In spite of fairly strong technical indicators, PGIM Short is not utilizing all of its potentials. The newest stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Blackstone and PGIM Short

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

The idea behind Blackstone Group and PGIM Short Duration 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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.