Correlation Between Blackstone and Gladstone Investment
Can any of the company-specific risk be diversified away by investing in both Blackstone and Gladstone Investment 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 Gladstone Investment into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Blackstone Group and Gladstone Investment, you can compare the effects of market volatilities on Blackstone and Gladstone Investment 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 Gladstone Investment. Check out your portfolio center. Please also check ongoing floating volatility patterns of Blackstone and Gladstone Investment.
Diversification Opportunities for Blackstone and Gladstone Investment
0.68 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Blackstone and Gladstone is 0.68. Overlapping area represents the amount of risk that can be diversified away by holding Blackstone Group and Gladstone Investment in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Gladstone Investment 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 Gladstone Investment. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Gladstone Investment has no effect on the direction of Blackstone i.e., Blackstone and Gladstone Investment go up and down completely randomly.
Pair Corralation between Blackstone and Gladstone Investment
Allowing for the 90-day total investment horizon Blackstone Group is expected to generate 1.61 times more return on investment than Gladstone Investment. However, Blackstone is 1.61 times more volatile than Gladstone Investment. It trades about 0.14 of its potential returns per unit of risk. Gladstone Investment is currently generating about 0.07 per unit of risk. If you would invest 8,203 in Blackstone Group on August 27, 2024 and sell it today you would earn a total of 11,702 from holding Blackstone Group or generate 142.66% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Blackstone Group vs. Gladstone Investment
Performance |
| Timeline |
| Blackstone Group |
| Gladstone Investment |
Blackstone and Gladstone Investment Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Blackstone and Gladstone Investment
The main advantage of trading using opposite Blackstone and Gladstone Investment positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Blackstone position performs unexpectedly, Gladstone Investment 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 Gladstone Investment will offset losses from the drop in Gladstone Investment's long position.| Blackstone vs. PowerUp Acquisition Corp | Blackstone vs. Aurora Innovation | Blackstone vs. HUMANA INC | Blackstone vs. Aquagold International |
| Gladstone Investment vs. PowerUp Acquisition Corp | Gladstone Investment vs. Aurora Innovation | Gladstone Investment vs. HUMANA INC | Gladstone Investment vs. Aquagold International |
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 Portfolio Comparator module to compare the composition, asset allocations and performance of any two portfolios in your account.
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