Correlation Between Blackstone Loan and Indutrade

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

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

Diversification Opportunities for Blackstone Loan and Indutrade

0.47

Correlation Coefficient

Blackstone Loan  Indutrade

Very weak diversification

The 3 months correlation between Blackstone and Indutrade is 0.47. Overlapping area represents the amount of risk that can be diversified away by holding Blackstone Loan Financing and Indutrade AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Indutrade AB and Blackstone Loan 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 Loan Financing are associated (or correlated) with Indutrade. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Indutrade AB has no effect on the direction of Blackstone Loan i.e., Blackstone Loan and Indutrade go up and down completely randomly.

Pair Corralation between Blackstone Loan and Indutrade

Assuming the 90 days trading horizon Blackstone Loan is expected to generate 6.98 times less return on investment than Indutrade. But when comparing it to its historical volatility, Blackstone Loan Financing is 1.79 times less risky than Indutrade. It trades about 0.05 of its potential returns per unit of risk. Indutrade AB is currently generating about 0.21 of returns per unit of risk over similar time horizon. If you would invest  26,910  in Indutrade AB on November 20, 2024 and sell it today you would earn a total of  5,450  from holding Indutrade AB or generate 20.25% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	62.3%
Values	Daily Returns

Blackstone Loan Financing  vs.  Indutrade AB

Blackstone Loan Financing

Risk-Adjusted Performance

Insignificant

Over the last 90 days Blackstone Loan Financing has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable basic indicators, Blackstone Loan is not utilizing all of its potentials. The newest stock price uproar, may contribute to short-horizon losses for the private investors.

Indutrade AB

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Indutrade AB are ranked lower than 16 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain basic indicators, Indutrade unveiled solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Blackstone Loan and Indutrade

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

The idea behind Blackstone Loan Financing and Indutrade AB 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 CEOs Directory module to screen CEOs from public companies around the world.