Correlation Between Blackstone and Moelis
Can any of the company-specific risk be diversified away by investing in both Blackstone and Moelis 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 Moelis into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Blackstone Group and Moelis Co, you can compare the effects of market volatilities on Blackstone and Moelis 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 Moelis. Check out your portfolio center. Please also check ongoing floating volatility patterns of Blackstone and Moelis.
Diversification Opportunities for Blackstone and Moelis
0.47 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Blackstone and Moelis is 0.47. Overlapping area represents the amount of risk that can be diversified away by holding Blackstone Group and Moelis Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Moelis 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 Moelis. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Moelis has no effect on the direction of Blackstone i.e., Blackstone and Moelis go up and down completely randomly.
Pair Corralation between Blackstone and Moelis
Allowing for the 90-day total investment horizon Blackstone is expected to generate 1.09 times less return on investment than Moelis. In addition to that, Blackstone is 1.13 times more volatile than Moelis Co. It trades about 0.03 of its total potential returns per unit of risk. Moelis Co is currently generating about 0.03 per unit of volatility. If you would invest 4,043 in Moelis Co on January 21, 2024 and sell it today you would earn a total of 1,122 from holding Moelis Co or generate 27.75% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 99.8% |
| Values | Daily Returns |
Blackstone Group vs. Moelis Co
Performance |
| Timeline |
| Blackstone Group |
| Moelis |
Blackstone and Moelis Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Blackstone and Moelis
The main advantage of trading using opposite Blackstone and Moelis positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Blackstone position performs unexpectedly, Moelis 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 Moelis will offset losses from the drop in Moelis' long position.| 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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.
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