Correlation Between Blackstone and Standard Life

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

Diversification Opportunities for Blackstone and Standard Life

-0.82

Correlation Coefficient

Blackstone  Standard Life

Pay attention - limited upside

The 3 months correlation between Blackstone and Standard is -0.82. Overlapping area represents the amount of risk that can be diversified away by holding Blackstone Group and Standard Life Aberdeen in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Standard Life Aberdeen 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 Standard Life. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Standard Life Aberdeen has no effect on the direction of Blackstone i.e., Blackstone and Standard Life go up and down completely randomly.

Pair Corralation between Blackstone and Standard Life

Allowing for the 90-day total investment horizon Blackstone Group is expected to under-perform the Standard Life. But the stock apears to be less risky and, when comparing its historical volatility, Blackstone Group is 1.36 times less risky than Standard Life. The stock trades about -0.1 of its potential returns per unit of risk. The Standard Life Aberdeen is currently generating about 0.16 of returns per unit of risk over similar time horizon. If you would invest  706.00  in Standard Life Aberdeen on December 23, 2024 and sell it today you would earn a total of  199.00  from holding Standard Life Aberdeen or generate 28.19% return on investment over 90 days.

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

Blackstone Group  vs.  Standard Life Aberdeen

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.

Standard Life Aberdeen

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Standard Life Aberdeen are ranked lower than 12 (%) of all global equities and portfolios over the last 90 days. In spite of fairly weak basic indicators, Standard Life showed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Blackstone and Standard Life

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

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