Correlation Between Blackstone and Crawford

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

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

Diversification Opportunities for Blackstone and Crawford

0.83

Correlation Coefficient

Blackstone  Crawford

Very poor diversification

The 3 months correlation between Blackstone and Crawford is 0.83. Overlapping area represents the amount of risk that can be diversified away by holding Blackstone Group and Crawford Company in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Crawford 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 Crawford. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Crawford has no effect on the direction of Blackstone i.e., Blackstone and Crawford go up and down completely randomly.

Pair Corralation between Blackstone and Crawford

Allowing for the 90-day total investment horizon Blackstone Group is expected to generate 1.09 times more return on investment than Crawford. However, Blackstone is 1.09 times more volatile than Crawford Company. It trades about 0.04 of its potential returns per unit of risk. Crawford Company is currently generating about 0.04 per unit of risk. If you would invest  11,657  in Blackstone Group on March 5, 2025 and sell it today you would earn a total of  2,244  from holding Blackstone Group or generate 19.25% return on investment over 90 days.

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

Blackstone Group  vs.  Crawford Company

Blackstone Group

Risk-Adjusted Performance

Very Weak

Over the last 90 days Blackstone Group has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly strong basic indicators, Blackstone is not utilizing all of its potentials. The latest stock price disturbance, may contribute to short-term losses for the investors.

Crawford

Risk-Adjusted Performance

Very Weak

Over the last 90 days Crawford Company has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest inconsistent performance, the Stock's basic indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the company investors.

Pair Trading with Blackstone and Crawford

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

The idea behind Blackstone Group and Crawford Company 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 Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.