Correlation Between Blackstone and Bright Horizons
Can any of the company-specific risk be diversified away by investing in both Blackstone and Bright Horizons 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 Bright Horizons into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Blackstone Group and Bright Horizons Family, you can compare the effects of market volatilities on Blackstone and Bright Horizons 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 Bright Horizons. Check out your portfolio center. Please also check ongoing floating volatility patterns of Blackstone and Bright Horizons.
Diversification Opportunities for Blackstone and Bright Horizons
-0.88 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Blackstone and Bright is -0.88. Overlapping area represents the amount of risk that can be diversified away by holding Blackstone Group and Bright Horizons Family in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bright Horizons Family 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 Bright Horizons. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bright Horizons Family has no effect on the direction of Blackstone i.e., Blackstone and Bright Horizons go up and down completely randomly.
Pair Corralation between Blackstone and Bright Horizons
Assuming the 90 days trading horizon Blackstone Group is expected to generate 0.84 times more return on investment than Bright Horizons. However, Blackstone Group is 1.2 times less risky than Bright Horizons. It trades about 0.14 of its potential returns per unit of risk. Bright Horizons Family is currently generating about -0.02 per unit of risk. If you would invest 16,838 in Blackstone Group on September 13, 2024 and sell it today you would earn a total of 964.00 from holding Blackstone Group or generate 5.73% 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. Bright Horizons Family
Performance |
| Timeline |
| Blackstone Group |
| Bright Horizons Family |
Blackstone and Bright Horizons Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Blackstone and Bright Horizons
The main advantage of trading using opposite Blackstone and Bright Horizons positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Blackstone position performs unexpectedly, Bright Horizons 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 Bright Horizons will offset losses from the drop in Bright Horizons' long position.| Blackstone vs. Zijin Mining Group | Blackstone vs. Chuangs China Investments | Blackstone vs. Gladstone Investment | Blackstone vs. New Residential Investment |
| Bright Horizons vs. Service International | Bright Horizons vs. BOYD GROUP SERVICES | Bright Horizons vs. Frontdoor | Bright Horizons vs. CVS Group plc |
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 Commodity Channel module to use Commodity Channel Index to analyze current equity momentum.
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