Correlation Between Blackstone and Ares Commercial

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

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

Diversification Opportunities for Blackstone and Ares Commercial

0.08

Correlation Coefficient

Blackstone  Ares Commercial

Significant diversification

The 3 months correlation between Blackstone and Ares is 0.08. Overlapping area represents the amount of risk that can be diversified away by holding Blackstone Group and Ares Commercial Real in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ares Commercial Real 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 Ares Commercial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ares Commercial Real has no effect on the direction of Blackstone i.e., Blackstone and Ares Commercial go up and down completely randomly.

Pair Corralation between Blackstone and Ares Commercial

Allowing for the 90-day total investment horizon Blackstone Group is expected to generate 0.99 times more return on investment than Ares Commercial. However, Blackstone Group is 1.01 times less risky than Ares Commercial. It trades about 0.17 of its potential returns per unit of risk. Ares Commercial Real is currently generating about -0.09 per unit of risk. If you would invest  13,896  in Blackstone Group on May 8, 2025 and sell it today you would earn a total of  2,872  from holding Blackstone Group or generate 20.67% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

Blackstone Group  vs.  Ares Commercial Real

Blackstone Group

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Blackstone Group are ranked lower than 13 (%) of all global equities and portfolios over the last 90 days. In spite of fairly abnormal basic indicators, Blackstone showed solid returns over the last few months and may actually be approaching a breakup point.

Ares Commercial Real

Risk-Adjusted Performance

Weakest

Over the last 90 days Ares Commercial Real has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest inconsistent performance, the Stock's basic indicators remain sound and the latest tumult on Wall Street may also be a sign of longer-term gains for the firm shareholders.

Pair Trading with Blackstone and Ares Commercial

The main advantage of trading using opposite Blackstone and Ares Commercial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Blackstone position performs unexpectedly, Ares Commercial 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 Ares Commercial will offset losses from the drop in Ares Commercial's long position.

The idea behind Blackstone Group and Ares Commercial Real 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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.