Correlation Between WisdomTree Investments and Blackstone

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

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

Diversification Opportunities for WisdomTree Investments and Blackstone

0.94

Correlation Coefficient

WisdomTree Investments  Blackstone

Almost no diversification

The 3 months correlation between WisdomTree and Blackstone is 0.94. Overlapping area represents the amount of risk that can be diversified away by holding WisdomTree Investments and Blackstone Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Blackstone Group and WisdomTree Investments 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 WisdomTree Investments 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 WisdomTree Investments i.e., WisdomTree Investments and Blackstone go up and down completely randomly.

Pair Corralation between WisdomTree Investments and Blackstone

Assuming the 90 days horizon WisdomTree Investments is expected to generate 1.08 times less return on investment than Blackstone. In addition to that, WisdomTree Investments is 1.0 times more volatile than Blackstone Group. It trades about 0.09 of its total potential returns per unit of risk. Blackstone Group is currently generating about 0.09 per unit of volatility. If you would invest  7,266  in Blackstone Group on September 4, 2024 and sell it today you would earn a total of  10,854  from holding Blackstone Group or generate 149.38% return on investment over 90 days.

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

WisdomTree Investments  vs.  Blackstone Group

WisdomTree Investments

Risk-Adjusted Performance

12 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in WisdomTree Investments are ranked lower than 12 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, WisdomTree Investments reported solid returns over the last few months and may actually be approaching a breakup point.

Blackstone Group

Risk-Adjusted Performance

23 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Blackstone Group are ranked lower than 23 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, Blackstone reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with WisdomTree Investments and Blackstone

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

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 Dashboard module to portfolio dashboard that provides centralized access to all your investments.