Correlation Between FIREWEED METALS and Blackstone

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

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

Diversification Opportunities for FIREWEED METALS and Blackstone

-0.43

Correlation Coefficient

FIREWEED METALS  Blackstone

Very good diversification

The 3 months correlation between FIREWEED and Blackstone is -0.43. Overlapping area represents the amount of risk that can be diversified away by holding FIREWEED METALS P and Blackstone Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Blackstone Group and FIREWEED METALS 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 FIREWEED METALS P 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 FIREWEED METALS i.e., FIREWEED METALS and Blackstone go up and down completely randomly.

Pair Corralation between FIREWEED METALS and Blackstone

Assuming the 90 days horizon FIREWEED METALS is expected to generate 1.41 times less return on investment than Blackstone. In addition to that, FIREWEED METALS is 1.83 times more volatile than Blackstone Group. It trades about 0.04 of its total potential returns per unit of risk. Blackstone Group is currently generating about 0.11 per unit of volatility. If you would invest  10,655  in Blackstone Group on October 9, 2024 and sell it today you would earn a total of  6,145  from holding Blackstone Group or generate 57.67% return on investment over 90 days.

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

FIREWEED METALS P  vs.  Blackstone Group

FIREWEED METALS P

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days FIREWEED METALS P has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable basic indicators, FIREWEED METALS is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

Blackstone Group

Risk-Adjusted Performance

15 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Blackstone Group are ranked lower than 15 (%) of all global equities and portfolios over the last 90 days. Despite nearly unsteady basic indicators, Blackstone reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with FIREWEED METALS and Blackstone

The main advantage of trading using opposite FIREWEED METALS and Blackstone positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if FIREWEED METALS 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 FIREWEED METALS P 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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.