Correlation Between Brookfield Corp and Blackstone
Can any of the company-specific risk be diversified away by investing in both Brookfield Corp and Blackstone 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 Brookfield Corp and Blackstone into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Brookfield Corp and Blackstone Group, you can compare the effects of market volatilities on Brookfield Corp and Blackstone 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 Brookfield Corp with a short position of Blackstone. Check out your portfolio center. Please also check ongoing floating volatility patterns of Brookfield Corp and Blackstone.
Diversification Opportunities for Brookfield Corp and Blackstone
0.92 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Brookfield and Blackstone is 0.92. Overlapping area represents the amount of risk that can be diversified away by holding Brookfield Corp and Blackstone Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Blackstone Group and Brookfield Corp 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 Brookfield Corp are associated (or correlated) with Blackstone. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Blackstone Group has no effect on the direction of Brookfield Corp i.e., Brookfield Corp and Blackstone go up and down completely randomly.
Pair Corralation between Brookfield Corp and Blackstone
Allowing for the 90-day total investment horizon Brookfield Corp is expected to generate 2.48 times less return on investment than Blackstone. But when comparing it to its historical volatility, Brookfield Corp is 1.06 times less risky than Blackstone. It trades about 0.16 of its potential returns per unit of risk. Blackstone Group is currently generating about 0.39 of returns per unit of risk over similar time horizon. If you would invest 16,763 in Blackstone Group on August 23, 2024 and sell it today you would earn a total of 2,638 from holding Blackstone Group or generate 15.74% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Brookfield Corp vs. Blackstone Group
Performance |
| Timeline |
| Brookfield Corp |
| Blackstone Group |
Brookfield Corp and Blackstone Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Brookfield Corp and Blackstone
The main advantage of trading using opposite Brookfield Corp and Blackstone positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Brookfield Corp position performs unexpectedly, Blackstone 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 Blackstone will offset losses from the drop in Blackstone's long position.| Brookfield Corp vs. KKR Co LP | Brookfield Corp vs. Blackstone Group | Brookfield Corp vs. T Rowe Price | Brookfield Corp vs. Apollo Global Management |
| Blackstone vs. T Rowe Price | Blackstone vs. State Street Corp | Blackstone vs. KKR Co LP | Blackstone vs. Brookfield Asset Management |
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 Equity Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.
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