Correlation Between Blackstone and Better Home
Can any of the company-specific risk be diversified away by investing in both Blackstone and Better Home 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 Better Home into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Blackstone Group and Better Home Finance, you can compare the effects of market volatilities on Blackstone and Better Home 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 Better Home. Check out your portfolio center. Please also check ongoing floating volatility patterns of Blackstone and Better Home.
Diversification Opportunities for Blackstone and Better Home
-0.66 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Blackstone and Better is -0.66. Overlapping area represents the amount of risk that can be diversified away by holding Blackstone Group and Better Home Finance in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Better Home Finance 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 Better Home. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Better Home Finance has no effect on the direction of Blackstone i.e., Blackstone and Better Home go up and down completely randomly.
Pair Corralation between Blackstone and Better Home
Allowing for the 90-day total investment horizon Blackstone Group is expected to generate 0.42 times more return on investment than Better Home. However, Blackstone Group is 2.37 times less risky than Better Home. It trades about 0.35 of its potential returns per unit of risk. Better Home Finance is currently generating about 0.03 per unit of risk. If you would invest 16,775 in Blackstone Group on September 1, 2024 and sell it today you would earn a total of 2,334 from holding Blackstone Group or generate 13.91% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Blackstone Group vs. Better Home Finance
Performance |
| Timeline |
| Blackstone Group |
| Better Home Finance |
Blackstone and Better Home Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Blackstone and Better Home
The main advantage of trading using opposite Blackstone and Better Home positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Blackstone position performs unexpectedly, Better Home 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 Better Home will offset losses from the drop in Better Home's long position.| Blackstone vs. T Rowe Price | Blackstone vs. State Street Corp | Blackstone vs. KKR Co LP | Blackstone vs. Brookfield Asset Management |
| Better Home vs. Thor Industries | Better Home vs. Mativ Holdings | Better Home vs. PACCAR Inc | Better Home vs. Wabash National |
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 Technical Analysis module to check basic technical indicators and analysis based on most latest market data.
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