Correlation Between Blackstone and Arch Capital
Can any of the company-specific risk be diversified away by investing in both Blackstone and Arch Capital 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 Arch Capital into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Blackstone Group and Arch Capital Group, you can compare the effects of market volatilities on Blackstone and Arch Capital 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 Arch Capital. Check out your portfolio center. Please also check ongoing floating volatility patterns of Blackstone and Arch Capital.
Diversification Opportunities for Blackstone and Arch Capital
-0.17 | Correlation Coefficient |
Good diversification
The 3 months correlation between Blackstone and Arch is -0.17. Overlapping area represents the amount of risk that can be diversified away by holding Blackstone Group and Arch Capital Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Arch Capital Group 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 Arch Capital. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Arch Capital Group has no effect on the direction of Blackstone i.e., Blackstone and Arch Capital go up and down completely randomly.
Pair Corralation between Blackstone and Arch Capital
Allowing for the 90-day total investment horizon Blackstone Group is expected to generate 2.05 times more return on investment than Arch Capital. However, Blackstone is 2.05 times more volatile than Arch Capital Group. It trades about 0.35 of its potential returns per unit of risk. Arch Capital Group is currently generating about -0.19 per unit of risk. If you would invest 16,606 in Blackstone Group on August 24, 2024 and sell it today you would earn a total of 1,897 from holding Blackstone Group or generate 11.42% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 95.65% |
| Values | Daily Returns |
Blackstone Group vs. Arch Capital Group
Performance |
| Timeline |
| Blackstone Group |
| Arch Capital Group |
Blackstone and Arch Capital Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Blackstone and Arch Capital
The main advantage of trading using opposite Blackstone and Arch Capital positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Blackstone position performs unexpectedly, Arch Capital 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 Arch Capital will offset losses from the drop in Arch Capital's long position.| Blackstone vs. T Rowe Price | Blackstone vs. State Street Corp | Blackstone vs. KKR Co LP | Blackstone vs. Brookfield Asset Management |
| Arch Capital vs. Athene Holding | Arch Capital vs. The Hartford Financial | Arch Capital vs. Arch Capital Group | Arch Capital vs. Athene Holding |
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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.
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