Correlation Between Blackstone and Yara International

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

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

Diversification Opportunities for Blackstone and Yara International

-0.88

Correlation Coefficient

Blackstone  Yara International

Pay attention - limited upside

The 3 months correlation between Blackstone and Yara is -0.88. Overlapping area represents the amount of risk that can be diversified away by holding Blackstone Group and Yara International ASA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Yara International ASA 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 Yara International. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Yara International ASA has no effect on the direction of Blackstone i.e., Blackstone and Yara International go up and down completely randomly.

Pair Corralation between Blackstone and Yara International

Assuming the 90 days trading horizon Blackstone Group is expected to generate 1.3 times more return on investment than Yara International. However, Blackstone is 1.3 times more volatile than Yara International ASA. It trades about 0.31 of its potential returns per unit of risk. Yara International ASA is currently generating about -0.14 per unit of risk. If you would invest  12,232  in Blackstone Group on September 5, 2024 and sell it today you would earn a total of  5,768  from holding Blackstone Group or generate 47.16% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Significant
Accuracy	98.46%
Values	Daily Returns

Blackstone Group  vs.  Yara International ASA

Blackstone Group

Risk-Adjusted Performance

24 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Blackstone Group are ranked lower than 24 (%) 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.

Yara International ASA

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Yara International ASA has generated negative risk-adjusted returns adding no value to investors with long positions. Despite fragile performance in the last few months, the Stock's basic indicators remain nearly stable which may send shares a bit higher in January 2025. The current disturbance may also be a sign of long-run up-swing for the company stockholders.

Pair Trading with Blackstone and Yara International

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

The idea behind Blackstone Group and Yara International ASA 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 Equity Valuation module to check real value of public entities based on technical and fundamental data.