Correlation Between Snap and Blackstone
Can any of the company-specific risk be diversified away by investing in both Snap 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 Snap and Blackstone into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Snap Inc and Blackstone Group, you can compare the effects of market volatilities on Snap 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 Snap with a short position of Blackstone. Check out your portfolio center. Please also check ongoing floating volatility patterns of Snap and Blackstone.
Diversification Opportunities for Snap and Blackstone
0.68 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Snap and Blackstone is 0.68. Overlapping area represents the amount of risk that can be diversified away by holding Snap Inc and Blackstone Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Blackstone Group and Snap 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 Snap 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 Snap i.e., Snap and Blackstone go up and down completely randomly.
Pair Corralation between Snap and Blackstone
Given the investment horizon of 90 days Snap is expected to generate 1.89 times less return on investment than Blackstone. In addition to that, Snap is 2.79 times more volatile than Blackstone Group. It trades about 0.09 of its total potential returns per unit of risk. Blackstone Group is currently generating about 0.45 per unit of volatility. If you would invest 16,997 in Blackstone Group on August 27, 2024 and sell it today you would earn a total of 2,908 from holding Blackstone Group or generate 17.11% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Snap Inc vs. Blackstone Group
Performance |
| Timeline |
| Snap Inc |
| Blackstone Group |
Snap and Blackstone Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Snap and Blackstone
The main advantage of trading using opposite Snap and Blackstone positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Snap 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 Snap 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 Portfolio File Import module to quickly import all of your third-party portfolios from your local drive in csv format.
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