Correlation Between Blackstone Secured and Dreyfus Natural

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

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

Diversification Opportunities for Blackstone Secured and Dreyfus Natural

-0.62

Correlation Coefficient

Blackstone Secured  Dreyfus Natural

Excellent diversification

The 3 months correlation between Blackstone and Dreyfus is -0.62. Overlapping area represents the amount of risk that can be diversified away by holding Blackstone Secured Lending and Dreyfus Natural Resources in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Dreyfus Natural Resources and Blackstone Secured 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 Secured Lending are associated (or correlated) with Dreyfus Natural. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Dreyfus Natural Resources has no effect on the direction of Blackstone Secured i.e., Blackstone Secured and Dreyfus Natural go up and down completely randomly.

Pair Corralation between Blackstone Secured and Dreyfus Natural

Given the investment horizon of 90 days Blackstone Secured Lending is expected to generate 0.61 times more return on investment than Dreyfus Natural. However, Blackstone Secured Lending is 1.65 times less risky than Dreyfus Natural. It trades about 0.19 of its potential returns per unit of risk. Dreyfus Natural Resources is currently generating about -0.11 per unit of risk. If you would invest  2,872  in Blackstone Secured Lending on October 9, 2024 and sell it today you would earn a total of  316.00  from holding Blackstone Secured Lending or generate 11.0% return on investment over 90 days.

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

Blackstone Secured Lending  vs.  Dreyfus Natural Resources

Blackstone Secured

Risk-Adjusted Performance

14 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Blackstone Secured Lending are ranked lower than 14 (%) of all funds and portfolios of funds over the last 90 days. Despite quite unsteady basic indicators, Blackstone Secured may actually be approaching a critical reversion point that can send shares even higher in February 2025.

Dreyfus Natural Resources

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Dreyfus Natural Resources has generated negative risk-adjusted returns adding no value to fund investors. In spite of latest weak performance, the Fund's basic indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the fund investors.

Pair Trading with Blackstone Secured and Dreyfus Natural

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

The idea behind Blackstone Secured Lending and Dreyfus Natural Resources 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 Price Ceiling Movement module to calculate and plot Price Ceiling Movement for different equity instruments.