Correlation Between Xp and Blackstone
Can any of the company-specific risk be diversified away by investing in both Xp 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 Xp and Blackstone into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Xp Inc and Blackstone Group, you can compare the effects of market volatilities on Xp 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 Xp with a short position of Blackstone. Check out your portfolio center. Please also check ongoing floating volatility patterns of Xp and Blackstone.
Diversification Opportunities for Xp and Blackstone
-0.69 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Xp and Blackstone is -0.69. Overlapping area represents the amount of risk that can be diversified away by holding Xp Inc and Blackstone Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Blackstone Group and Xp 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 Xp 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 Xp i.e., Xp and Blackstone go up and down completely randomly.
Pair Corralation between Xp and Blackstone
Allowing for the 90-day total investment horizon Xp Inc is expected to under-perform the Blackstone. In addition to that, Xp is 1.29 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 0.32 per unit of volatility. If you would invest 13,856 in Blackstone Group on August 23, 2024 and sell it today you would earn a total of 5,545 from holding Blackstone Group or generate 40.02% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Xp Inc vs. Blackstone Group
Performance |
| Timeline |
| Xp Inc |
| Blackstone Group |
Xp and Blackstone Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Xp and Blackstone
The main advantage of trading using opposite Xp and Blackstone positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Xp 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 Xp 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. 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 Balance Of Power module to check stock momentum by analyzing Balance Of Power indicator and other technical ratios.
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