Correlation Between Blackstone and REINET INVESTMENTS
Can any of the company-specific risk be diversified away by investing in both Blackstone and REINET INVESTMENTS 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 REINET INVESTMENTS into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Blackstone Group and REINET INVESTMENTS SCA, you can compare the effects of market volatilities on Blackstone and REINET INVESTMENTS 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 REINET INVESTMENTS. Check out your portfolio center. Please also check ongoing floating volatility patterns of Blackstone and REINET INVESTMENTS.
Diversification Opportunities for Blackstone and REINET INVESTMENTS
0.67 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Blackstone and REINET is 0.67. Overlapping area represents the amount of risk that can be diversified away by holding Blackstone Group and REINET INVESTMENTS SCA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on REINET INVESTMENTS SCA 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 REINET INVESTMENTS. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of REINET INVESTMENTS SCA has no effect on the direction of Blackstone i.e., Blackstone and REINET INVESTMENTS go up and down completely randomly.
Pair Corralation between Blackstone and REINET INVESTMENTS
Assuming the 90 days trading horizon Blackstone Group is expected to generate 1.5 times more return on investment than REINET INVESTMENTS. However, Blackstone is 1.5 times more volatile than REINET INVESTMENTS SCA. It trades about 0.4 of its potential returns per unit of risk. REINET INVESTMENTS SCA is currently generating about 0.11 per unit of risk. If you would invest 15,620 in Blackstone Group on August 28, 2024 and sell it today you would earn a total of 3,072 from holding Blackstone Group or generate 19.67% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Blackstone Group vs. REINET INVESTMENTS SCA
Performance |
| Timeline |
| Blackstone Group |
| REINET INVESTMENTS SCA |
Blackstone and REINET INVESTMENTS Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Blackstone and REINET INVESTMENTS
The main advantage of trading using opposite Blackstone and REINET INVESTMENTS positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Blackstone position performs unexpectedly, REINET INVESTMENTS 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 REINET INVESTMENTS will offset losses from the drop in REINET INVESTMENTS's long position.| Blackstone vs. The Bank of | Blackstone vs. Superior Plus Corp | Blackstone vs. NMI Holdings | Blackstone vs. Origin Agritech |
| REINET INVESTMENTS vs. LION ONE METALS | REINET INVESTMENTS vs. Sumitomo Rubber Industries | REINET INVESTMENTS vs. SANOK RUBBER ZY | REINET INVESTMENTS vs. ScanSource |
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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.
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