Correlation Between Blackstone and Lithium One
Can any of the company-specific risk be diversified away by investing in both Blackstone and Lithium One 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 Lithium One into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Blackstone Group and Lithium One Metals, you can compare the effects of market volatilities on Blackstone and Lithium One 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 Lithium One. Check out your portfolio center. Please also check ongoing floating volatility patterns of Blackstone and Lithium One.
Diversification Opportunities for Blackstone and Lithium One
-0.51 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Blackstone and Lithium is -0.51. Overlapping area represents the amount of risk that can be diversified away by holding Blackstone Group and Lithium One Metals in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lithium One Metals 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 Lithium One. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Lithium One Metals has no effect on the direction of Blackstone i.e., Blackstone and Lithium One go up and down completely randomly.
Pair Corralation between Blackstone and Lithium One
Allowing for the 90-day total investment horizon Blackstone Group is expected to generate 0.15 times more return on investment than Lithium One. However, Blackstone Group is 6.64 times less risky than Lithium One. It trades about 0.34 of its potential returns per unit of risk. Lithium One Metals is currently generating about -0.07 per unit of risk. If you would invest 16,814 in Blackstone Group on September 2, 2024 and sell it today you would earn a total of 2,295 from holding Blackstone Group or generate 13.65% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Blackstone Group vs. Lithium One Metals
Performance |
| Timeline |
| Blackstone Group |
| Lithium One Metals |
Blackstone and Lithium One Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Blackstone and Lithium One
The main advantage of trading using opposite Blackstone and Lithium One positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Blackstone position performs unexpectedly, Lithium One 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 Lithium One will offset losses from the drop in Lithium One's long position.| Blackstone vs. T Rowe Price | Blackstone vs. State Street Corp | Blackstone vs. KKR Co LP | Blackstone vs. Brookfield Asset Management |
| Lithium One vs. SunLink Health Systems | Lithium One vs. Capital Clean Energy | Lithium One vs. National Vision Holdings | Lithium One vs. SkyWest |
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 Price Transformation module to use Price Transformation models to analyze the depth of different equity instruments across global markets.
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