Correlation Between Blackstone Gso and First Trust

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

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

Diversification Opportunities for Blackstone Gso and First Trust

0.19

Correlation Coefficient

Blackstone Gso  First Trust

Average diversification

The 3 months correlation between Blackstone and First is 0.19. Overlapping area represents the amount of risk that can be diversified away by holding Blackstone Gso Senior and First Trust Senior in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on First Trust Senior 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 Senior are associated (or correlated) with First Trust. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of First Trust Senior has no effect on the direction of Blackstone Gso i.e., Blackstone Gso and First Trust go up and down completely randomly.

Pair Corralation between Blackstone Gso and First Trust

Considering the 90-day investment horizon Blackstone Gso Senior is expected to under-perform the First Trust. But the fund apears to be less risky and, when comparing its historical volatility, Blackstone Gso Senior is 1.07 times less risky than First Trust. The fund trades about -0.02 of its potential returns per unit of risk. The First Trust Senior is currently generating about 0.0 of returns per unit of risk over similar time horizon. If you would invest  1,018  in First Trust Senior on December 29, 2024 and sell it today you would lose (1.00) from holding First Trust Senior or give up 0.1% of portfolio value over 90 days.

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

Blackstone Gso Senior  vs.  First Trust Senior

Blackstone Gso Senior

Risk-Adjusted Performance

Very Weak

Over the last 90 days Blackstone Gso Senior has generated negative risk-adjusted returns adding no value to fund investors. Despite quite persistent basic indicators, Blackstone Gso is not utilizing all of its potentials. The newest stock price mess, may contribute to short-term losses for the institutional investors.

First Trust Senior

Risk-Adjusted Performance

Very Weak

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

Pair Trading with Blackstone Gso and First Trust

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

The idea behind Blackstone Gso Senior and First Trust Senior 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 Earnings Calls module to check upcoming earnings announcements updated hourly across public exchanges.