Correlation Between Blackstone and JAPAN TOBACCO
Can any of the company-specific risk be diversified away by investing in both Blackstone and JAPAN TOBACCO 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 TOBACCO 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 TOBACCO UNSPADR12, you can compare the effects of market volatilities on Blackstone and JAPAN TOBACCO 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 TOBACCO. Check out your portfolio center. Please also check ongoing floating volatility patterns of Blackstone and JAPAN TOBACCO.
Diversification Opportunities for Blackstone and JAPAN TOBACCO
-0.41 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Blackstone and JAPAN is -0.41. Overlapping area represents the amount of risk that can be diversified away by holding Blackstone Group and JAPAN TOBACCO UNSPADR12 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on JAPAN TOBACCO UNSPADR12 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 TOBACCO. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of JAPAN TOBACCO UNSPADR12 has no effect on the direction of Blackstone i.e., Blackstone and JAPAN TOBACCO go up and down completely randomly.
Pair Corralation between Blackstone and JAPAN TOBACCO
Assuming the 90 days trading horizon Blackstone Group is expected to generate 1.34 times more return on investment than JAPAN TOBACCO. However, Blackstone is 1.34 times more volatile than JAPAN TOBACCO UNSPADR12. It trades about 0.1 of its potential returns per unit of risk. JAPAN TOBACCO UNSPADR12 is currently generating about 0.06 per unit of risk. If you would invest 7,008 in Blackstone Group on August 30, 2024 and sell it today you would earn a total of 11,376 from holding Blackstone Group or generate 162.33% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Blackstone Group vs. JAPAN TOBACCO UNSPADR12
Performance |
| Timeline |
| Blackstone Group |
| JAPAN TOBACCO UNSPADR12 |
Blackstone and JAPAN TOBACCO Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Blackstone and JAPAN TOBACCO
The main advantage of trading using opposite Blackstone and JAPAN TOBACCO positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Blackstone position performs unexpectedly, JAPAN TOBACCO 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 TOBACCO will offset losses from the drop in JAPAN TOBACCO's long position.| Blackstone vs. JAPAN TOBACCO UNSPADR12 | Blackstone vs. BRIT AMER TOBACCO | Blackstone vs. THAI BEVERAGE | Blackstone vs. LIFEWAY FOODS |
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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 Portfolio Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.
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