Correlation Between Warner Bros and Blackstone
Can any of the company-specific risk be diversified away by investing in both Warner Bros 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 Warner Bros and Blackstone into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Warner Bros Discovery and Blackstone Group, you can compare the effects of market volatilities on Warner Bros 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 Warner Bros with a short position of Blackstone. Check out your portfolio center. Please also check ongoing floating volatility patterns of Warner Bros and Blackstone.
Diversification Opportunities for Warner Bros and Blackstone
0.81 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Warner and Blackstone is 0.81. Overlapping area represents the amount of risk that can be diversified away by holding Warner Bros Discovery and Blackstone Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Blackstone Group and Warner Bros 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 Warner Bros Discovery 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 Warner Bros i.e., Warner Bros and Blackstone go up and down completely randomly.
Pair Corralation between Warner Bros and Blackstone
Considering the 90-day investment horizon Warner Bros is expected to generate 1.72 times less return on investment than Blackstone. In addition to that, Warner Bros is 1.83 times more volatile than Blackstone Group. It trades about 0.07 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 |
Warner Bros Discovery vs. Blackstone Group
Performance |
| Timeline |
| Warner Bros Discovery |
| Blackstone Group |
Warner Bros and Blackstone Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Warner Bros and Blackstone
The main advantage of trading using opposite Warner Bros and Blackstone positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Warner Bros 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.| Warner Bros vs. Walt Disney | Warner Bros vs. Roku Inc | Warner Bros vs. Netflix | Warner Bros vs. Paramount Global Class |
| 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 Portfolio Anywhere module to track or share privately all of your investments from the convenience of any device.
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