Correlation Between Blackstone and RiverNorthDoubleLine

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Can any of the company-specific risk be diversified away by investing in both Blackstone and RiverNorthDoubleLine 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 and RiverNorthDoubleLine into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Blackstone Group and RiverNorthDoubleLine Strategic Opportunity, you can compare the effects of market volatilities on Blackstone and RiverNorthDoubleLine 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 with a short position of RiverNorthDoubleLine. Check out your portfolio center. Please also check ongoing floating volatility patterns of Blackstone and RiverNorthDoubleLine.

Diversification Opportunities for Blackstone and RiverNorthDoubleLine

-0.84
  Correlation Coefficient

Pay attention - limited upside

The 3 months correlation between Blackstone and RiverNorthDoubleLine is -0.84. Overlapping area represents the amount of risk that can be diversified away by holding Blackstone Group and RiverNorthDoubleLine Strategic in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on RiverNorthDoubleLine and Blackstone 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 Group are associated (or correlated) with RiverNorthDoubleLine. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of RiverNorthDoubleLine has no effect on the direction of Blackstone i.e., Blackstone and RiverNorthDoubleLine go up and down completely randomly.

Pair Corralation between Blackstone and RiverNorthDoubleLine

Allowing for the 90-day total investment horizon Blackstone Group is expected to generate 2.87 times more return on investment than RiverNorthDoubleLine. However, Blackstone is 2.87 times more volatile than RiverNorthDoubleLine Strategic Opportunity. It trades about 0.12 of its potential returns per unit of risk. RiverNorthDoubleLine Strategic Opportunity is currently generating about 0.1 per unit of risk. If you would invest  11,017  in Blackstone Group on September 6, 2024 and sell it today you would earn a total of  7,533  from holding Blackstone Group or generate 68.38% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Against 
StrengthSignificant
Accuracy100.0%
ValuesDaily Returns

Blackstone Group  vs.  RiverNorthDoubleLine Strategic

 Performance 
       Timeline  
Blackstone Group 

Risk-Adjusted Performance

22 of 100

 
Weak
 
Strong
Solid
Compared to the overall equity markets, risk-adjusted returns on investments in Blackstone Group are ranked lower than 22 (%) of all global equities and portfolios over the last 90 days. In spite of fairly abnormal basic indicators, Blackstone showed solid returns over the last few months and may actually be approaching a breakup point.
RiverNorthDoubleLine 

Risk-Adjusted Performance

0 of 100

 
Weak
 
Strong
Very Weak
Over the last 90 days RiverNorthDoubleLine Strategic Opportunity has generated negative risk-adjusted returns adding no value to investors with long positions. Even with relatively invariable basic indicators, RiverNorthDoubleLine is not utilizing all of its potentials. The current stock price agitation, may contribute to short-term losses for the retail investors.

Blackstone and RiverNorthDoubleLine Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Blackstone and RiverNorthDoubleLine

The main advantage of trading using opposite Blackstone and RiverNorthDoubleLine positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Blackstone position performs unexpectedly, RiverNorthDoubleLine 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 RiverNorthDoubleLine will offset losses from the drop in RiverNorthDoubleLine's long position.
The idea behind Blackstone Group and RiverNorthDoubleLine Strategic Opportunity 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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.

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