Correlation Between Zscaler and Blackstone

Can any of the company-specific risk be diversified away by investing in both Zscaler 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 Zscaler and Blackstone into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Zscaler and Blackstone Group, you can compare the effects of market volatilities on Zscaler 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 Zscaler with a short position of Blackstone. Check out your portfolio center. Please also check ongoing floating volatility patterns of Zscaler and Blackstone.

Diversification Opportunities for Zscaler and Blackstone

0.87

Correlation Coefficient

Zscaler  Blackstone

Very poor diversification

The @@bw1eo months correlation between Zscaler and Blackstone is 0.87. Overlapping area represents the amount of risk that can be diversified away by holding Zscaler and Blackstone Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Blackstone Group and Zscaler 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 Zscaler 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 Zscaler i.e., Zscaler and Blackstone go up and down completely randomly.

Pair Corralation between Zscaler and Blackstone

Allowing for the 90-day total investment horizon Zscaler is expected to generate 1.43 times more return on investment than Blackstone. However, Zscaler is 1.43 times more volatile than Blackstone Group. It trades about 0.08 of its potential returns per unit of risk. Blackstone Group is currently generating about 0.09 per unit of risk. If you would invest  11,005  in Zscaler on February 3, 2024 and sell it today you would earn a total of  6,706  from holding Zscaler or generate 60.94% return on investment over 90 days.

Time Period	@@bw1EO Months [change]
Direction	Moves Together
Strength	Strong
Accuracy	100.0%
Values	Daily Returns

Zscaler  vs.  Blackstone Group

Zscaler

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Zscaler has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of abnormal performance in the last few months, the Stock's basic indicators remain comparatively stable which may send shares a bit higher in June 2024. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.

Blackstone Group

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Blackstone Group has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of abnormal performance in the last few months, the Stock's basic indicators remain fairly strong which may send shares a bit higher in June 2024. The current disturbance may also be a sign of long term up-swing for the company investors.

Pair Trading with Zscaler and Blackstone

The main advantage of trading using opposite Zscaler and Blackstone positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Zscaler 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 Zscaler 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.

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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 Premium Stories module to follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope.