Correlation Between Blackstone Secured and FS KKR

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

Diversification Opportunities for Blackstone Secured and FS KKR

0.92

Correlation Coefficient

Blackstone Secured  FS KKR

Almost no diversification

The 3 months correlation between Blackstone and FSK is 0.92. Overlapping area represents the amount of risk that can be diversified away by holding Blackstone Secured Lending and FS KKR Capital in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on FS KKR Capital 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 FS KKR. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of FS KKR Capital has no effect on the direction of Blackstone Secured i.e., Blackstone Secured and FS KKR go up and down completely randomly.

Pair Corralation between Blackstone Secured and FS KKR

Given the investment horizon of 90 days Blackstone Secured Lending is expected to generate 0.93 times more return on investment than FS KKR. However, Blackstone Secured Lending is 1.07 times less risky than FS KKR. It trades about 0.11 of its potential returns per unit of risk. FS KKR Capital is currently generating about 0.1 per unit of risk. If you would invest  2,563  in Blackstone Secured Lending on October 8, 2024 and sell it today you would earn a total of  656.00  from holding Blackstone Secured Lending or generate 25.6% return on investment over 90 days.

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

Blackstone Secured Lending  vs.  FS KKR Capital

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.

FS KKR Capital

Risk-Adjusted Performance

20 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in FS KKR Capital are ranked lower than 20 (%) of all global equities and portfolios over the last 90 days. Despite quite unsteady basic indicators, FS KKR may actually be approaching a critical reversion point that can send shares even higher in February 2025.

Pair Trading with Blackstone Secured and FS KKR

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

The idea behind Blackstone Secured Lending and FS KKR Capital 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 Portfolio Dashboard module to portfolio dashboard that provides centralized access to all your investments.