Correlation Between Blackstone and NorthView Acquisition
Can any of the company-specific risk be diversified away by investing in both Blackstone and NorthView Acquisition 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 NorthView Acquisition into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Blackstone Group and NorthView Acquisition, you can compare the effects of market volatilities on Blackstone and NorthView Acquisition 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 NorthView Acquisition. Check out your portfolio center. Please also check ongoing floating volatility patterns of Blackstone and NorthView Acquisition.
Diversification Opportunities for Blackstone and NorthView Acquisition
-0.53 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Blackstone and NorthView is -0.53. Overlapping area represents the amount of risk that can be diversified away by holding Blackstone Group and NorthView Acquisition in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on NorthView Acquisition 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 NorthView Acquisition. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of NorthView Acquisition has no effect on the direction of Blackstone i.e., Blackstone and NorthView Acquisition go up and down completely randomly.
Pair Corralation between Blackstone and NorthView Acquisition
Allowing for the 90-day total investment horizon Blackstone is expected to generate 102.86 times less return on investment than NorthView Acquisition. But when comparing it to its historical volatility, Blackstone Group is 75.34 times less risky than NorthView Acquisition. It trades about 0.1 of its potential returns per unit of risk. NorthView Acquisition is currently generating about 0.14 of returns per unit of risk over similar time horizon. If you would invest 15.00 in NorthView Acquisition on August 30, 2024 and sell it today you would lose (11.07) from holding NorthView Acquisition or give up 73.8% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 60.0% |
| Values | Daily Returns |
Blackstone Group vs. NorthView Acquisition
Performance |
| Timeline |
| Blackstone Group |
| NorthView Acquisition |
Blackstone and NorthView Acquisition Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Blackstone and NorthView Acquisition
The main advantage of trading using opposite Blackstone and NorthView Acquisition positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Blackstone position performs unexpectedly, NorthView Acquisition 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 NorthView Acquisition will offset losses from the drop in NorthView Acquisition's long position.The idea behind Blackstone Group and NorthView Acquisition 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 Global Correlations module to find global opportunities by holding instruments from different markets.
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