Correlation Between Blackstone and Cartesian Growth
Can any of the company-specific risk be diversified away by investing in both Blackstone and Cartesian Growth 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 Cartesian Growth into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Blackstone Group and Cartesian Growth, you can compare the effects of market volatilities on Blackstone and Cartesian Growth 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 Cartesian Growth. Check out your portfolio center. Please also check ongoing floating volatility patterns of Blackstone and Cartesian Growth.
Diversification Opportunities for Blackstone and Cartesian Growth
-0.79 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Blackstone and Cartesian is -0.79. Overlapping area represents the amount of risk that can be diversified away by holding Blackstone Group and Cartesian Growth in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cartesian Growth 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 Cartesian Growth. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Cartesian Growth has no effect on the direction of Blackstone i.e., Blackstone and Cartesian Growth go up and down completely randomly.
Pair Corralation between Blackstone and Cartesian Growth
Allowing for the 90-day total investment horizon Blackstone Group is expected to generate 0.09 times more return on investment than Cartesian Growth. However, Blackstone Group is 11.24 times less risky than Cartesian Growth. It trades about 0.27 of its potential returns per unit of risk. Cartesian Growth is currently generating about -0.22 per unit of risk. If you would invest 16,981 in Blackstone Group on August 30, 2024 and sell it today you would earn a total of 1,921 from holding Blackstone Group or generate 11.31% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Blackstone Group vs. Cartesian Growth
Performance |
| Timeline |
| Blackstone Group |
| Cartesian Growth |
Blackstone and Cartesian Growth Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Blackstone and Cartesian Growth
The main advantage of trading using opposite Blackstone and Cartesian Growth positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Blackstone position performs unexpectedly, Cartesian Growth 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 Cartesian Growth will offset losses from the drop in Cartesian Growth's long position.The idea behind Blackstone Group and Cartesian Growth 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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.
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