Correlation Between Blackstone and Franklin Resources
Can any of the company-specific risk be diversified away by investing in both Blackstone and Franklin Resources 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 Franklin Resources into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Blackstone Group and Franklin Resources, you can compare the effects of market volatilities on Blackstone and Franklin Resources 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 Franklin Resources. Check out your portfolio center. Please also check ongoing floating volatility patterns of Blackstone and Franklin Resources.
Diversification Opportunities for Blackstone and Franklin Resources
0.45 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Blackstone and Franklin is 0.45. Overlapping area represents the amount of risk that can be diversified away by holding Blackstone Group and Franklin Resources in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Franklin Resources 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 Franklin Resources. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Franklin Resources has no effect on the direction of Blackstone i.e., Blackstone and Franklin Resources go up and down completely randomly.
Pair Corralation between Blackstone and Franklin Resources
Allowing for the 90-day total investment horizon Blackstone is expected to generate 8.38 times less return on investment than Franklin Resources. But when comparing it to its historical volatility, Blackstone Group is 1.27 times less risky than Franklin Resources. It trades about 0.03 of its potential returns per unit of risk. Franklin Resources is currently generating about 0.17 of returns per unit of risk over similar time horizon. If you would invest 2,041 in Franklin Resources on November 4, 2024 and sell it today you would earn a total of 183.00 from holding Franklin Resources or generate 8.97% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Blackstone Group vs. Franklin Resources
Performance |
| Timeline |
| Blackstone Group |
| Franklin Resources |
Blackstone and Franklin Resources Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Blackstone and Franklin Resources
The main advantage of trading using opposite Blackstone and Franklin Resources positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Blackstone position performs unexpectedly, Franklin Resources 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 Franklin Resources will offset losses from the drop in Franklin Resources' long position.| Blackstone vs. T Rowe Price | Blackstone vs. State Street Corp | Blackstone vs. KKR Co LP | Blackstone vs. Brookfield Asset Management |
| Franklin Resources vs. BlackRock | Franklin Resources vs. Main Street Capital | Franklin Resources vs. Blackstone Group | Franklin Resources vs. Ares Capital |
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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.
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