Correlation Between TPG and Blackstone
Can any of the company-specific risk be diversified away by investing in both TPG 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 TPG and Blackstone into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between TPG Inc and Blackstone Group, you can compare the effects of market volatilities on TPG 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 TPG with a short position of Blackstone. Check out your portfolio center. Please also check ongoing floating volatility patterns of TPG and Blackstone.
Diversification Opportunities for TPG and Blackstone
0.92 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between TPG and Blackstone is 0.92. Overlapping area represents the amount of risk that can be diversified away by holding TPG Inc and Blackstone Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Blackstone Group and TPG 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 TPG 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 TPG i.e., TPG and Blackstone go up and down completely randomly.
Pair Corralation between TPG and Blackstone
Considering the 90-day investment horizon TPG is expected to generate 2.17 times less return on investment than Blackstone. In addition to that, TPG is 1.82 times more volatile than Blackstone Group. It trades about 0.08 of its total potential returns per unit of risk. Blackstone Group is currently generating about 0.33 per unit of volatility. If you would invest 16,997 in Blackstone Group on August 28, 2024 and sell it today you would earn a total of 2,315 from holding Blackstone Group or generate 13.62% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
TPG Inc vs. Blackstone Group
Performance |
| Timeline |
| TPG Inc |
| Blackstone Group |
TPG and Blackstone Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with TPG and Blackstone
The main advantage of trading using opposite TPG and Blackstone positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if TPG 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.| TPG vs. Ares Management LP | TPG vs. Patria Investments | TPG vs. Apollo Global Management | TPG vs. Cion Investment Corp |
| 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 Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.
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