Correlation Between Blackstone and PennantPark Investment
Can any of the company-specific risk be diversified away by investing in both Blackstone and PennantPark Investment 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 PennantPark Investment into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Blackstone Group and PennantPark Investment, you can compare the effects of market volatilities on Blackstone and PennantPark Investment 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 PennantPark Investment. Check out your portfolio center. Please also check ongoing floating volatility patterns of Blackstone and PennantPark Investment.
Diversification Opportunities for Blackstone and PennantPark Investment
0.89 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Blackstone and PennantPark is 0.89. Overlapping area represents the amount of risk that can be diversified away by holding Blackstone Group and PennantPark Investment in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on PennantPark Investment 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 PennantPark Investment. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of PennantPark Investment has no effect on the direction of Blackstone i.e., Blackstone and PennantPark Investment go up and down completely randomly.
Pair Corralation between Blackstone and PennantPark Investment
Assuming the 90 days trading horizon Blackstone Group is expected to generate 1.0 times more return on investment than PennantPark Investment. However, Blackstone Group is 1.0 times less risky than PennantPark Investment. It trades about 0.31 of its potential returns per unit of risk. PennantPark Investment is currently generating about 0.06 per unit of risk. If you would invest 15,522 in Blackstone Group on August 26, 2024 and sell it today you would earn a total of 2,630 from holding Blackstone Group or generate 16.94% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Blackstone Group vs. PennantPark Investment
Performance |
| Timeline |
| Blackstone Group |
| PennantPark Investment |
Blackstone and PennantPark Investment Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Blackstone and PennantPark Investment
The main advantage of trading using opposite Blackstone and PennantPark Investment positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Blackstone position performs unexpectedly, PennantPark Investment 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 PennantPark Investment will offset losses from the drop in PennantPark Investment's long position.| Blackstone vs. CompuGroup Medical SE | Blackstone vs. SCOTT TECHNOLOGY | Blackstone vs. Clearside Biomedical | Blackstone vs. Avanos Medical |
| PennantPark Investment vs. The Bank of | PennantPark Investment vs. Ares Management Corp | PennantPark Investment vs. Superior Plus Corp | PennantPark Investment vs. NMI Holdings |
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 Bond Analysis module to evaluate and analyze corporate bonds as a potential investment for your portfolios..
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