Correlation Between Blackstone and Cactus Acquisition
Can any of the company-specific risk be diversified away by investing in both Blackstone and Cactus Acquisition 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 Cactus Acquisition into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Blackstone Group and Cactus Acquisition Corp, you can compare the effects of market volatilities on Blackstone and Cactus Acquisition 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 Cactus Acquisition. Check out your portfolio center. Please also check ongoing floating volatility patterns of Blackstone and Cactus Acquisition.
Diversification Opportunities for Blackstone and Cactus Acquisition
-0.33 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Blackstone and Cactus is -0.33. Overlapping area represents the amount of risk that can be diversified away by holding Blackstone Group and Cactus Acquisition Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cactus Acquisition Corp 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 Cactus Acquisition. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Cactus Acquisition Corp has no effect on the direction of Blackstone i.e., Blackstone and Cactus Acquisition go up and down completely randomly.
Pair Corralation between Blackstone and Cactus Acquisition
Allowing for the 90-day total investment horizon Blackstone Group is expected to generate 0.43 times more return on investment than Cactus Acquisition. However, Blackstone Group is 2.33 times less risky than Cactus Acquisition. It trades about 0.26 of its potential returns per unit of risk. Cactus Acquisition Corp is currently generating about 0.0 per unit of risk. If you would invest 16,997 in Blackstone Group on August 29, 2024 and sell it today you would earn a total of 1,905 from holding Blackstone Group or generate 11.21% 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. Cactus Acquisition Corp
Performance |
| Timeline |
| Blackstone Group |
| Cactus Acquisition Corp |
Blackstone and Cactus Acquisition Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Blackstone and Cactus Acquisition
The main advantage of trading using opposite Blackstone and Cactus Acquisition positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Blackstone position performs unexpectedly, Cactus Acquisition 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 Cactus Acquisition will offset losses from the drop in Cactus Acquisition's long position.The idea behind Blackstone Group and Cactus Acquisition Corp 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.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 Headlines Timeline module to stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity.
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