Correlation Between NXG NextGen and Blackstone Gso

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

By analyzing existing cross correlation between NXG NextGen Infrastructure and Blackstone Gso Long, you can compare the effects of market volatilities on NXG NextGen and Blackstone Gso 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 NXG NextGen with a short position of Blackstone Gso. Check out your portfolio center. Please also check ongoing floating volatility patterns of NXG NextGen and Blackstone Gso.

Diversification Opportunities for NXG NextGen and Blackstone Gso

0.49

Correlation Coefficient

NXG NextGen  Blackstone Gso

Very weak diversification

The 3 months correlation between NXG and Blackstone is 0.49. Overlapping area represents the amount of risk that can be diversified away by holding NXG NextGen Infrastructure and Blackstone Gso Long in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Blackstone Gso Long and NXG NextGen 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 NXG NextGen Infrastructure are associated (or correlated) with Blackstone Gso. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Blackstone Gso Long has no effect on the direction of NXG NextGen i.e., NXG NextGen and Blackstone Gso go up and down completely randomly.

Pair Corralation between NXG NextGen and Blackstone Gso

Considering the 90-day investment horizon NXG NextGen Infrastructure is expected to under-perform the Blackstone Gso. In addition to that, NXG NextGen is 4.18 times more volatile than Blackstone Gso Long. It trades about -0.29 of its total potential returns per unit of risk. Blackstone Gso Long is currently generating about 0.01 per unit of volatility. If you would invest  1,267  in Blackstone Gso Long on September 29, 2024 and sell it today you would earn a total of  1.00  from holding Blackstone Gso Long or generate 0.08% return on investment over 90 days.

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

NXG NextGen Infrastructure  vs.  Blackstone Gso Long

NXG NextGen Infrastr

Risk-Adjusted Performance

5 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in NXG NextGen Infrastructure are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. Despite nearly inconsistent basic indicators, NXG NextGen may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Blackstone Gso Long

Risk-Adjusted Performance

4 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Blackstone Gso Long are ranked lower than 4 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong technical and fundamental indicators, Blackstone Gso is not utilizing all of its potentials. The newest stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with NXG NextGen and Blackstone Gso

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

The idea behind NXG NextGen Infrastructure and Blackstone Gso Long 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 AI Portfolio Architect module to use AI to generate optimal portfolios and find profitable investment opportunities.