Correlation Between Blackstone and Ally Financial
Can any of the company-specific risk be diversified away by investing in both Blackstone and Ally Financial 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 Ally Financial into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Blackstone Group and Ally Financial, you can compare the effects of market volatilities on Blackstone and Ally Financial 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 Ally Financial. Check out your portfolio center. Please also check ongoing floating volatility patterns of Blackstone and Ally Financial.
Diversification Opportunities for Blackstone and Ally Financial
-0.29 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Blackstone and Ally is -0.29. Overlapping area represents the amount of risk that can be diversified away by holding Blackstone Group and Ally Financial in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ally Financial 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 Ally Financial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ally Financial has no effect on the direction of Blackstone i.e., Blackstone and Ally Financial go up and down completely randomly.
Pair Corralation between Blackstone and Ally Financial
Allowing for the 90-day total investment horizon Blackstone Group is expected to generate 0.81 times more return on investment than Ally Financial. However, Blackstone Group is 1.23 times less risky than Ally Financial. It trades about 0.14 of its potential returns per unit of risk. Ally Financial is currently generating about 0.06 per unit of risk. If you would invest 10,956 in Blackstone Group on August 26, 2024 and sell it today you would earn a total of 8,949 from holding Blackstone Group or generate 81.68% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Blackstone Group vs. Ally Financial
Performance |
| Timeline |
| Blackstone Group |
| Ally Financial |
Blackstone and Ally Financial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Blackstone and Ally Financial
The main advantage of trading using opposite Blackstone and Ally Financial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Blackstone position performs unexpectedly, Ally Financial 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 Ally Financial will offset losses from the drop in Ally Financial's long position.| Blackstone vs. PowerUp Acquisition Corp | Blackstone vs. Aurora Innovation | Blackstone vs. HUMANA INC | Blackstone vs. Aquagold International |
| Ally Financial vs. American Express | Ally Financial vs. Mastercard | Ally Financial vs. Visa Class A | Ally Financial vs. PayPal Holdings |
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 FinTech Suite module to use AI to screen and filter profitable investment opportunities.
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