Correlation Between Blackstone and Medallion Bank
Can any of the company-specific risk be diversified away by investing in both Blackstone and Medallion Bank 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 Medallion Bank into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Blackstone Group and Medallion Bank PR, you can compare the effects of market volatilities on Blackstone and Medallion Bank 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 Medallion Bank. Check out your portfolio center. Please also check ongoing floating volatility patterns of Blackstone and Medallion Bank.
Diversification Opportunities for Blackstone and Medallion Bank
0.88 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Blackstone and Medallion is 0.88. Overlapping area represents the amount of risk that can be diversified away by holding Blackstone Group and Medallion Bank PR in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Medallion Bank PR 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 Medallion Bank. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Medallion Bank PR has no effect on the direction of Blackstone i.e., Blackstone and Medallion Bank go up and down completely randomly.
Pair Corralation between Blackstone and Medallion Bank
Allowing for the 90-day total investment horizon Blackstone Group is expected to generate 1.26 times more return on investment than Medallion Bank. However, Blackstone is 1.26 times more volatile than Medallion Bank PR. It trades about 0.35 of its potential returns per unit of risk. Medallion Bank PR is currently generating about 0.1 per unit of risk. If you would invest 16,606 in Blackstone Group on August 24, 2024 and sell it today you would earn a total of 1,897 from holding Blackstone Group or generate 11.42% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 95.65% |
| Values | Daily Returns |
Blackstone Group vs. Medallion Bank PR
Performance |
| Timeline |
| Blackstone Group |
| Medallion Bank PR |
Blackstone and Medallion Bank Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Blackstone and Medallion Bank
The main advantage of trading using opposite Blackstone and Medallion Bank positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Blackstone position performs unexpectedly, Medallion Bank 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 Medallion Bank will offset losses from the drop in Medallion Bank's long position.| Blackstone vs. T Rowe Price | Blackstone vs. State Street Corp | Blackstone vs. KKR Co LP | Blackstone vs. Brookfield Asset Management |
| Medallion Bank vs. Merchants Bancorp | Medallion Bank vs. Medalist Diversified Reit | Medallion Bank vs. Northern Trust | Medallion Bank vs. First Citizens BancShares |
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 Equity Forecasting module to use basic forecasting models to generate price predictions and determine price momentum.
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