Correlation Between Blackstone and Rocket Companies
Can any of the company-specific risk be diversified away by investing in both Blackstone and Rocket Companies 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 Rocket Companies into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Blackstone Group and Rocket Companies, you can compare the effects of market volatilities on Blackstone and Rocket Companies 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 Rocket Companies. Check out your portfolio center. Please also check ongoing floating volatility patterns of Blackstone and Rocket Companies.
Diversification Opportunities for Blackstone and Rocket Companies
-0.88 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Blackstone and Rocket is -0.88. Overlapping area represents the amount of risk that can be diversified away by holding Blackstone Group and Rocket Companies in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Rocket Companies 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 Rocket Companies. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Rocket Companies has no effect on the direction of Blackstone i.e., Blackstone and Rocket Companies go up and down completely randomly.
Pair Corralation between Blackstone and Rocket Companies
Allowing for the 90-day total investment horizon Blackstone Group is expected to generate 0.7 times more return on investment than Rocket Companies. However, Blackstone Group is 1.43 times less risky than Rocket Companies. It trades about 0.44 of its potential returns per unit of risk. Rocket Companies is currently generating about -0.34 per unit of risk. If you would invest 16,879 in Blackstone Group on August 25, 2024 and sell it today you would earn a total of 3,026 from holding Blackstone Group or generate 17.93% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Blackstone Group vs. Rocket Companies
Performance |
| Timeline |
| Blackstone Group |
| Rocket Companies |
Blackstone and Rocket Companies Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Blackstone and Rocket Companies
The main advantage of trading using opposite Blackstone and Rocket Companies positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Blackstone position performs unexpectedly, Rocket Companies 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 Rocket Companies will offset losses from the drop in Rocket Companies' long position.| Blackstone vs. T Rowe Price | Blackstone vs. State Street Corp | Blackstone vs. KKR Co LP | Blackstone vs. Brookfield Asset Management |
| Rocket Companies vs. Loandepot | Rocket Companies vs. Mr Cooper Group | Rocket Companies vs. PennyMac Finl Svcs | Rocket Companies vs. Guild Holdings Co |
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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