Correlation Between Blackstone and ING Group

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Can any of the company-specific risk be diversified away by investing in both Blackstone and ING Group 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 ING Group into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Blackstone Group and ING Group NV, you can compare the effects of market volatilities on Blackstone and ING Group 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 ING Group. Check out your portfolio center. Please also check ongoing floating volatility patterns of Blackstone and ING Group.

Diversification Opportunities for Blackstone and ING Group

-0.31
  Correlation Coefficient

Very good diversification

The 3 months correlation between Blackstone and ING is -0.31. Overlapping area represents the amount of risk that can be diversified away by holding Blackstone Group and ING Group NV in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ING Group NV 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 ING Group. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ING Group NV has no effect on the direction of Blackstone i.e., Blackstone and ING Group go up and down completely randomly.

Pair Corralation between Blackstone and ING Group

Allowing for the 90-day total investment horizon Blackstone is expected to generate 7.15 times less return on investment than ING Group. In addition to that, Blackstone is 1.37 times more volatile than ING Group NV. It trades about 0.02 of its total potential returns per unit of risk. ING Group NV is currently generating about 0.18 per unit of volatility. If you would invest  1,561  in ING Group NV on November 9, 2024 and sell it today you would earn a total of  86.00  from holding ING Group NV or generate 5.51% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Against 
StrengthInsignificant
Accuracy100.0%
ValuesDaily Returns

Blackstone Group  vs.  ING Group NV

 Performance 
       Timeline  
Blackstone Group 

Risk-Adjusted Performance

Very Weak

 
Weak
 
Strong
Over the last 90 days Blackstone Group has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly strong basic indicators, Blackstone is not utilizing all of its potentials. The latest stock price disturbance, may contribute to short-term losses for the investors.
ING Group NV 

Risk-Adjusted Performance

Insignificant

 
Weak
 
Strong
Compared to the overall equity markets, risk-adjusted returns on investments in ING Group NV are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. Despite nearly stable basic indicators, ING Group is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

Blackstone and ING Group Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Blackstone and ING Group

The main advantage of trading using opposite Blackstone and ING Group positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Blackstone position performs unexpectedly, ING Group 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 ING Group will offset losses from the drop in ING Group's long position.
The idea behind Blackstone Group and ING Group NV 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 Portfolio File Import module to quickly import all of your third-party portfolios from your local drive in csv format.

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