Correlation Between Gabelli Equity and Blackstone

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

By analyzing existing cross correlation between The Gabelli Equity and Blackstone Group, you can compare the effects of market volatilities on Gabelli Equity and Blackstone 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 Gabelli Equity with a short position of Blackstone. Check out your portfolio center. Please also check ongoing floating volatility patterns of Gabelli Equity and Blackstone.

Diversification Opportunities for Gabelli Equity and Blackstone

-0.08

Correlation Coefficient

Gabelli Equity  Blackstone

Good diversification

The 3 months correlation between Gabelli and Blackstone is -0.08. Overlapping area represents the amount of risk that can be diversified away by holding The Gabelli Equity and Blackstone Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Blackstone Group and Gabelli Equity 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 The Gabelli Equity are associated (or correlated) with Blackstone. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Blackstone Group has no effect on the direction of Gabelli Equity i.e., Gabelli Equity and Blackstone go up and down completely randomly.

Pair Corralation between Gabelli Equity and Blackstone

Assuming the 90 days trading horizon Gabelli Equity is expected to generate 7.49 times less return on investment than Blackstone. But when comparing it to its historical volatility, The Gabelli Equity is 3.11 times less risky than Blackstone. It trades about 0.03 of its potential returns per unit of risk. Blackstone Group is currently generating about 0.08 of returns per unit of risk over similar time horizon. 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

The Gabelli Equity  vs.  Blackstone Group

Gabelli Equity

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days The Gabelli Equity has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest weak performance, the Preferred Stock's fundamental drivers remain strong and the recent confusion on Wall Street may also be a sign of long-lasting gains for the firm traders.

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.

Pair Trading with Gabelli Equity and Blackstone

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

The idea behind The Gabelli Equity and Blackstone 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 Financial Widgets module to easily integrated Macroaxis content with over 30 different plug-and-play financial widgets.