Correlation Between Volkswagen and Blackstone Loan

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

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

Diversification Opportunities for Volkswagen and Blackstone Loan

-0.77

Correlation Coefficient

Volkswagen  Blackstone Loan

Pay attention - limited upside

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

Pair Corralation between Volkswagen and Blackstone Loan

Assuming the 90 days trading horizon Volkswagen AG is expected to under-perform the Blackstone Loan. In addition to that, Volkswagen is 1.33 times more volatile than Blackstone Loan Financing. It trades about -0.06 of its total potential returns per unit of risk. Blackstone Loan Financing is currently generating about 0.16 per unit of volatility. If you would invest  5,698  in Blackstone Loan Financing on October 9, 2024 and sell it today you would earn a total of  702.00  from holding Blackstone Loan Financing or generate 12.32% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Weak
Accuracy	98.39%
Values	Daily Returns

Volkswagen AG  vs.  Blackstone Loan Financing

Volkswagen AG

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Volkswagen AG has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest unsteady performance, the Stock's basic indicators remain stable and the newest uproar on Wall Street may also be a sign of mid-term gains for the firm private investors.

Blackstone Loan Financing

Risk-Adjusted Performance

12 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Blackstone Loan Financing are ranked lower than 12 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively unsteady basic indicators, Blackstone Loan may actually be approaching a critical reversion point that can send shares even higher in February 2025.

Pair Trading with Volkswagen and Blackstone Loan

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

The idea behind Volkswagen AG and Blackstone Loan Financing 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 Price Transformation module to use Price Transformation models to analyze the depth of different equity instruments across global markets.