Correlation Between Blackstone Loan and Boston Properties

Can any of the company-specific risk be diversified away by investing in both Blackstone Loan and Boston Properties 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 Boston Properties 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 Boston Properties, you can compare the effects of market volatilities on Blackstone Loan and Boston Properties 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 Boston Properties. Check out your portfolio center. Please also check ongoing floating volatility patterns of Blackstone Loan and Boston Properties.

Diversification Opportunities for Blackstone Loan and Boston Properties

-0.14

Correlation Coefficient

Blackstone Loan  Boston Properties

Good diversification

The 3 months correlation between Blackstone and Boston is -0.14. Overlapping area represents the amount of risk that can be diversified away by holding Blackstone Loan Financing and Boston Properties in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Boston Properties 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 Boston Properties. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Boston Properties has no effect on the direction of Blackstone Loan i.e., Blackstone Loan and Boston Properties go up and down completely randomly.

Pair Corralation between Blackstone Loan and Boston Properties

Assuming the 90 days trading horizon Blackstone Loan Financing is expected to under-perform the Boston Properties. But the stock apears to be less risky and, when comparing its historical volatility, Blackstone Loan Financing is 2.3 times less risky than Boston Properties. The stock trades about 0.0 of its potential returns per unit of risk. The Boston Properties is currently generating about 0.02 of returns per unit of risk over similar time horizon. If you would invest  6,446  in Boston Properties on October 26, 2024 and sell it today you would earn a total of  935.00  from holding Boston Properties or generate 14.51% return on investment over 90 days.

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

Blackstone Loan Financing  vs.  Boston Properties

Blackstone Loan Financing

Risk-Adjusted Performance

0 of 100

Good

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 uncertain basic indicators, Blackstone Loan unveiled solid returns over the last few months and may actually be approaching a breakup point.

Boston Properties

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Boston Properties has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of uncertain performance in the last few months, the Stock's basic indicators remain comparatively stable which may send shares a bit higher in February 2025. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.

Pair Trading with Blackstone Loan and Boston Properties

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

The idea behind Blackstone Loan Financing and Boston Properties 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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.