Correlation Between Blackstone and State Street
Can any of the company-specific risk be diversified away by investing in both Blackstone and State Street 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 State Street into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Blackstone Group and State Street, you can compare the effects of market volatilities on Blackstone and State Street 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 State Street. Check out your portfolio center. Please also check ongoing floating volatility patterns of Blackstone and State Street.
Diversification Opportunities for Blackstone and State Street
0.96 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Blackstone and State is 0.96. Overlapping area represents the amount of risk that can be diversified away by holding Blackstone Group and State Street in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on State Street 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 State Street. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of State Street has no effect on the direction of Blackstone i.e., Blackstone and State Street go up and down completely randomly.
Pair Corralation between Blackstone and State Street
Assuming the 90 days trading horizon Blackstone Group is expected to generate 1.54 times more return on investment than State Street. However, Blackstone is 1.54 times more volatile than State Street. It trades about 0.3 of its potential returns per unit of risk. State Street is currently generating about 0.27 per unit of risk. If you would invest 15,580 in Blackstone Group on September 5, 2024 and sell it today you would earn a total of 2,420 from holding Blackstone Group or generate 15.53% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 95.65% |
| Values | Daily Returns |
Blackstone Group vs. State Street
Performance |
| Timeline |
| Blackstone Group |
| State Street |
Blackstone and State Street Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Blackstone and State Street
The main advantage of trading using opposite Blackstone and State Street positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Blackstone position performs unexpectedly, State Street 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 State Street will offset losses from the drop in State Street's long position.The idea behind Blackstone Group and State Street pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.| State Street vs. Blackstone Group | State Street vs. BlackRock | State Street vs. The Bank of | State Street vs. Ameriprise Financial |
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 ETFs module to find actively traded Exchange Traded Funds (ETF) from around the world.
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