Correlation Between Blackstone Gso and FAM

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

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

Diversification Opportunities for Blackstone Gso and FAM

0.29

Correlation Coefficient

Blackstone Gso  FAM

Modest diversification

The 3 months correlation between Blackstone and FAM is 0.29. Overlapping area represents the amount of risk that can be diversified away by holding Blackstone Gso Long and FAM in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on FAM and Blackstone Gso 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 Gso Long are associated (or correlated) with FAM. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of FAM has no effect on the direction of Blackstone Gso i.e., Blackstone Gso and FAM go up and down completely randomly.

Pair Corralation between Blackstone Gso and FAM

Considering the 90-day investment horizon Blackstone Gso is expected to generate 7.65 times less return on investment than FAM. But when comparing it to its historical volatility, Blackstone Gso Long is 1.77 times less risky than FAM. It trades about 0.06 of its potential returns per unit of risk. FAM is currently generating about 0.25 of returns per unit of risk over similar time horizon. If you would invest  647.00  in FAM on September 1, 2024 and sell it today you would earn a total of  27.00  from holding FAM or generate 4.17% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	25.4%
Values	Daily Returns

Blackstone Gso Long  vs.  FAM

Blackstone Gso Long

Risk-Adjusted Performance

4 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Blackstone Gso Long are ranked lower than 4 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong technical and fundamental indicators, Blackstone Gso is not utilizing all of its potentials. The newest stock price disturbance, may contribute to short-term losses for the investors.

FAM

Risk-Adjusted Performance

0 of 100

Solid

Over the last 90 days FAM has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of very uncertain basic indicators, FAM displayed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Blackstone Gso and FAM

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

The idea behind Blackstone Gso Long and FAM 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 Stock Tickers module to use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites.