Correlation Between Blackstone and Apollo Global

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

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

Diversification Opportunities for Blackstone and Apollo Global

0.94

Correlation Coefficient

Blackstone  Apollo Global

Almost no diversification

The 3 months correlation between Blackstone and Apollo is 0.94. Overlapping area represents the amount of risk that can be diversified away by holding Blackstone Group and Apollo Global Management in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Apollo Global Management 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 Apollo Global. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Apollo Global Management has no effect on the direction of Blackstone i.e., Blackstone and Apollo Global go up and down completely randomly.

Pair Corralation between Blackstone and Apollo Global

Allowing for the 90-day total investment horizon Blackstone is expected to generate 1.42 times less return on investment than Apollo Global. But when comparing it to its historical volatility, Blackstone Group is 1.24 times less risky than Apollo Global. It trades about 0.26 of its potential returns per unit of risk. Apollo Global Management is currently generating about 0.3 of returns per unit of risk over similar time horizon. If you would invest  11,540  in Apollo Global Management on August 30, 2024 and sell it today you would earn a total of  5,845  from holding Apollo Global Management or generate 50.65% return on investment over 90 days.

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

Blackstone Group  vs.  Apollo Global Management

Blackstone Group

Risk-Adjusted Performance

20 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Blackstone Group are ranked lower than 20 (%) of all global equities and portfolios over the last 90 days. In spite of fairly fragile basic indicators, Blackstone showed solid returns over the last few months and may actually be approaching a breakup point.

Apollo Global Management

Risk-Adjusted Performance

23 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Apollo Global Management are ranked lower than 23 (%) of all global equities and portfolios over the last 90 days. In spite of very fragile basic indicators, Apollo Global displayed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Blackstone and Apollo Global

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

The idea behind Blackstone Group and Apollo Global Management 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 Portfolio Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.