Correlation Between Blackstone and New Mountain
Can any of the company-specific risk be diversified away by investing in both Blackstone and New Mountain 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 New Mountain into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Blackstone Group and New Mountain Finance, you can compare the effects of market volatilities on Blackstone and New Mountain 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 New Mountain. Check out your portfolio center. Please also check ongoing floating volatility patterns of Blackstone and New Mountain.
Diversification Opportunities for Blackstone and New Mountain
-0.67 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Blackstone and New is -0.67. Overlapping area represents the amount of risk that can be diversified away by holding Blackstone Group and New Mountain Finance in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on New Mountain Finance 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 New Mountain. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of New Mountain Finance has no effect on the direction of Blackstone i.e., Blackstone and New Mountain go up and down completely randomly.
Pair Corralation between Blackstone and New Mountain
Allowing for the 90-day total investment horizon Blackstone Group is expected to generate 1.08 times more return on investment than New Mountain. However, Blackstone is 1.08 times more volatile than New Mountain Finance. It trades about 0.35 of its potential returns per unit of risk. New Mountain Finance is currently generating about 0.0 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 Against |
| Strength | Weak |
| Accuracy | 95.65% |
| Values | Daily Returns |
Blackstone Group vs. New Mountain Finance
Performance |
| Timeline |
| Blackstone Group |
| New Mountain Finance |
Blackstone and New Mountain Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Blackstone and New Mountain
The main advantage of trading using opposite Blackstone and New Mountain positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Blackstone position performs unexpectedly, New Mountain 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 New Mountain will offset losses from the drop in New Mountain's long position.| Blackstone vs. T Rowe Price | Blackstone vs. State Street Corp | Blackstone vs. KKR Co LP | Blackstone vs. Brookfield Asset Management |
| New Mountain vs. Invesco Advantage MIT | New Mountain vs. Invesco Municipal Trust | New Mountain vs. Invesco California Value | New Mountain vs. Victory Capital Holdings |
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 Transaction History module to view history of all your transactions and understand their impact on performance.
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