Correlation Between MBIA and Blackstone
Can any of the company-specific risk be diversified away by investing in both MBIA 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 MBIA and Blackstone into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between MBIA Inc and Blackstone Group, you can compare the effects of market volatilities on MBIA 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 MBIA with a short position of Blackstone. Check out your portfolio center. Please also check ongoing floating volatility patterns of MBIA and Blackstone.
Diversification Opportunities for MBIA and Blackstone
0.77 | Correlation Coefficient |
Poor diversification
The 3 months correlation between MBIA and Blackstone is 0.77. Overlapping area represents the amount of risk that can be diversified away by holding MBIA Inc and Blackstone Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Blackstone Group and MBIA 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 MBIA Inc 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 MBIA i.e., MBIA and Blackstone go up and down completely randomly.
Pair Corralation between MBIA and Blackstone
Considering the 90-day investment horizon MBIA Inc is expected to generate 3.32 times more return on investment than Blackstone. However, MBIA is 3.32 times more volatile than Blackstone Group. It trades about 0.56 of its potential returns per unit of risk. Blackstone Group is currently generating about 0.45 per unit of risk. If you would invest 378.00 in MBIA Inc on August 27, 2024 and sell it today you would earn a total of 325.00 from holding MBIA Inc or generate 85.98% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
MBIA Inc vs. Blackstone Group
Performance |
| Timeline |
| MBIA Inc |
| Blackstone Group |
MBIA and Blackstone Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with MBIA and Blackstone
The main advantage of trading using opposite MBIA and Blackstone positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if MBIA 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.The idea behind MBIA Inc and Blackstone Group 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.| Blackstone vs. PowerUp Acquisition Corp | Blackstone vs. Aurora Innovation | Blackstone vs. HUMANA INC | Blackstone vs. Aquagold International |
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 Content Syndication module to quickly integrate customizable finance content to your own investment portal.
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