Correlation Between Blackstone and AllianceBernstein
Can any of the company-specific risk be diversified away by investing in both Blackstone and AllianceBernstein 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 AllianceBernstein into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Blackstone Group and AllianceBernstein Holding LP, you can compare the effects of market volatilities on Blackstone and AllianceBernstein 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 AllianceBernstein. Check out your portfolio center. Please also check ongoing floating volatility patterns of Blackstone and AllianceBernstein.
Diversification Opportunities for Blackstone and AllianceBernstein
0.79 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Blackstone and AllianceBernstein is 0.79. Overlapping area represents the amount of risk that can be diversified away by holding Blackstone Group and AllianceBernstein Holding LP in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AllianceBernstein 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 AllianceBernstein. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of AllianceBernstein has no effect on the direction of Blackstone i.e., Blackstone and AllianceBernstein go up and down completely randomly.
Pair Corralation between Blackstone and AllianceBernstein
Allowing for the 90-day total investment horizon Blackstone Group is expected to generate 1.16 times more return on investment than AllianceBernstein. However, Blackstone is 1.16 times more volatile than AllianceBernstein Holding LP. It trades about 0.28 of its potential returns per unit of risk. AllianceBernstein Holding LP is currently generating about 0.11 per unit of risk. If you would invest 15,234 in Blackstone Group on August 30, 2024 and sell it today you would earn a total of 3,668 from holding Blackstone Group or generate 24.08% 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. AllianceBernstein Holding LP
Performance |
| Timeline |
| Blackstone Group |
| AllianceBernstein |
Blackstone and AllianceBernstein Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Blackstone and AllianceBernstein
The main advantage of trading using opposite Blackstone and AllianceBernstein positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Blackstone position performs unexpectedly, AllianceBernstein 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 AllianceBernstein will offset losses from the drop in AllianceBernstein's long position.The idea behind Blackstone Group and AllianceBernstein Holding LP 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.| AllianceBernstein vs. TPG Inc | AllianceBernstein vs. Carlyle Secured Lending | AllianceBernstein vs. Brookfield Corp |
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 Idea Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.
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