Correlation Between German American and Blackstone
Can any of the company-specific risk be diversified away by investing in both German American and Blackstone 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 German American and Blackstone into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between German American Bancorp and Blackstone Group, you can compare the effects of market volatilities on German American and Blackstone 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 German American with a short position of Blackstone. Check out your portfolio center. Please also check ongoing floating volatility patterns of German American and Blackstone.
Diversification Opportunities for German American and Blackstone
0.87 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between German and Blackstone is 0.87. Overlapping area represents the amount of risk that can be diversified away by holding German American Bancorp and Blackstone Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Blackstone Group and German American 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 German American Bancorp are associated (or correlated) with Blackstone. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Blackstone Group has no effect on the direction of German American i.e., German American and Blackstone go up and down completely randomly.
Pair Corralation between German American and Blackstone
Given the investment horizon of 90 days German American is expected to generate 1.34 times less return on investment than Blackstone. In addition to that, German American is 1.11 times more volatile than Blackstone Group. It trades about 0.15 of its total potential returns per unit of risk. Blackstone Group is currently generating about 0.23 per unit of volatility. If you would invest 11,791 in Blackstone Group on September 1, 2024 and sell it today you would earn a total of 7,318 from holding Blackstone Group or generate 62.06% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
German American Bancorp vs. Blackstone Group
Performance |
| Timeline |
| German American Bancorp |
| Blackstone Group |
German American and Blackstone Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with German American and Blackstone
The main advantage of trading using opposite German American and Blackstone positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if German American position performs unexpectedly, Blackstone 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 Blackstone will offset losses from the drop in Blackstone's long position.| German American vs. Lakeland Financial | German American vs. Great Southern Bancorp | German American vs. First Merchants | German American vs. First Financial |
| Blackstone vs. T Rowe Price | Blackstone vs. State Street Corp | Blackstone vs. KKR Co LP | Blackstone vs. Brookfield Asset Management |
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 Markets Map module to get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes.
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