Correlation Between Blackstone and Brookfield Asset
Can any of the company-specific risk be diversified away by investing in both Blackstone and Brookfield Asset 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 Blackstone and Brookfield Asset into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Blackstone Group and Brookfield Asset Management, you can compare the effects of market volatilities on Blackstone and Brookfield Asset 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 Blackstone with a short position of Brookfield Asset. Check out your portfolio center. Please also check ongoing floating volatility patterns of Blackstone and Brookfield Asset.
Diversification Opportunities for Blackstone and Brookfield Asset
0.73 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Blackstone and Brookfield is 0.73. Overlapping area represents the amount of risk that can be diversified away by holding Blackstone Group and Brookfield Asset Management in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Brookfield Asset Man and Blackstone 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 Blackstone Group are associated (or correlated) with Brookfield Asset. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Brookfield Asset Man has no effect on the direction of Blackstone i.e., Blackstone and Brookfield Asset go up and down completely randomly.
Pair Corralation between Blackstone and Brookfield Asset
Allowing for the 90-day total investment horizon Blackstone Group is expected to under-perform the Brookfield Asset. In addition to that, Blackstone is 1.38 times more volatile than Brookfield Asset Management. It trades about -0.26 of its total potential returns per unit of risk. Brookfield Asset Management is currently generating about -0.35 per unit of volatility. If you would invest 4,265 in Brookfield Asset Management on January 21, 2024 and sell it today you would lose (433.00) from holding Brookfield Asset Management or give up 10.15% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 95.45% |
| Values | Daily Returns |
Blackstone Group vs. Brookfield Asset Management
Performance |
| Timeline |
| Blackstone Group |
| Brookfield Asset Man |
Blackstone and Brookfield Asset Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Blackstone and Brookfield Asset
The main advantage of trading using opposite Blackstone and Brookfield Asset positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Blackstone position performs unexpectedly, Brookfield Asset 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 Brookfield Asset will offset losses from the drop in Brookfield Asset's long position.| Blackstone vs. T Rowe Price | Blackstone vs. State Street Corp | Blackstone vs. KKR Co LP | Blackstone vs. Brookfield Asset Management |
| Brookfield Asset vs. KKR Co LP | Brookfield Asset vs. Blackstone Group | Brookfield Asset vs. Apollo Global Management | Brookfield Asset vs. T Rowe Price |
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 Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.
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