Correlation Between Blackstone and Japan Asia
Can any of the company-specific risk be diversified away by investing in both Blackstone and Japan Asia 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 Japan Asia into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Blackstone Group and Japan Asia Investment, you can compare the effects of market volatilities on Blackstone and Japan Asia 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 Japan Asia. Check out your portfolio center. Please also check ongoing floating volatility patterns of Blackstone and Japan Asia.
Diversification Opportunities for Blackstone and Japan Asia
-0.33 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Blackstone and Japan is -0.33. Overlapping area represents the amount of risk that can be diversified away by holding Blackstone Group and Japan Asia Investment in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Japan Asia 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 Japan Asia. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Japan Asia Investment has no effect on the direction of Blackstone i.e., Blackstone and Japan Asia go up and down completely randomly.
Pair Corralation between Blackstone and Japan Asia
Assuming the 90 days trading horizon Blackstone Group is expected to generate 1.37 times more return on investment than Japan Asia. However, Blackstone is 1.37 times more volatile than Japan Asia Investment. It trades about 0.47 of its potential returns per unit of risk. Japan Asia Investment is currently generating about 0.2 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 3,548 from holding Blackstone Group or generate 22.86% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Blackstone Group vs. Japan Asia Investment
Performance |
| Timeline |
| Blackstone Group |
| Japan Asia Investment |
Blackstone and Japan Asia Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Blackstone and Japan Asia
The main advantage of trading using opposite Blackstone and Japan Asia positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Blackstone position performs unexpectedly, Japan Asia 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 Japan Asia will offset losses from the drop in Japan Asia's long position.| Blackstone vs. The Bank of | Blackstone vs. Superior Plus Corp | Blackstone vs. NMI Holdings | Blackstone vs. Origin Agritech |
| Japan Asia vs. The Bank of | Japan Asia vs. Superior Plus Corp | Japan Asia vs. NMI Holdings | Japan Asia vs. Origin Agritech |
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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.
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