Correlation Between Blackstone and Israel Acquisitions

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

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

Diversification Opportunities for Blackstone and Israel Acquisitions

0.77

Correlation Coefficient

Blackstone  Israel Acquisitions

Poor diversification

The 3 months correlation between Blackstone and Israel is 0.77. Overlapping area represents the amount of risk that can be diversified away by holding Blackstone Group and Israel Acquisitions Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Israel Acquisitions Corp 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 Israel Acquisitions. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Israel Acquisitions Corp has no effect on the direction of Blackstone i.e., Blackstone and Israel Acquisitions go up and down completely randomly.

Pair Corralation between Blackstone and Israel Acquisitions

Allowing for the 90-day total investment horizon Blackstone Group is expected to generate 10.28 times more return on investment than Israel Acquisitions. However, Blackstone is 10.28 times more volatile than Israel Acquisitions Corp. It trades about 0.13 of its potential returns per unit of risk. Israel Acquisitions Corp is currently generating about 0.12 per unit of risk. If you would invest  15,234  in Blackstone Group on September 28, 2024 and sell it today you would earn a total of  2,335  from holding Blackstone Group or generate 15.33% return on investment over 90 days.

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

Blackstone Group  vs.  Israel Acquisitions Corp

Blackstone Group

Risk-Adjusted Performance

10 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Blackstone Group are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. In spite of fairly inconsistent basic indicators, Blackstone showed solid returns over the last few months and may actually be approaching a breakup point.

Israel Acquisitions Corp

Risk-Adjusted Performance

9 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Israel Acquisitions Corp are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. Despite quite persistent basic indicators, Israel Acquisitions is not utilizing all of its potentials. The latest stock price mess, may contribute to short-term losses for the institutional investors.

Pair Trading with Blackstone and Israel Acquisitions

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

The idea behind Blackstone Group and Israel Acquisitions Corp 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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.