Correlation Between Blackstone Secured and Prudential Core

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

Diversification Opportunities for Blackstone Secured and Prudential Core

-0.71

Correlation Coefficient

Blackstone Secured  Prudential Core

Pay attention - limited upside

The 3 months correlation between Blackstone and Prudential is -0.71. Overlapping area represents the amount of risk that can be diversified away by holding Blackstone Secured Lending and Prudential Core Conservative in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Prudential Core Cons 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 Prudential Core. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Prudential Core Cons has no effect on the direction of Blackstone Secured i.e., Blackstone Secured and Prudential Core go up and down completely randomly.

Pair Corralation between Blackstone Secured and Prudential Core

Given the investment horizon of 90 days Blackstone Secured Lending is expected to generate 2.82 times more return on investment than Prudential Core. However, Blackstone Secured is 2.82 times more volatile than Prudential Core Conservative. It trades about 0.19 of its potential returns per unit of risk. Prudential Core Conservative is currently generating about -0.12 per unit of risk. If you would invest  2,900  in Blackstone Secured Lending on October 6, 2024 and sell it today you would earn a total of  319.00  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.  Prudential Core Conservative

Blackstone Secured

Risk-Adjusted Performance

15 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Blackstone Secured Lending are ranked lower than 15 (%) 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.

Prudential Core Cons

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Prudential Core Conservative has generated negative risk-adjusted returns adding no value to fund investors. In spite of fairly strong basic indicators, Prudential Core is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Blackstone Secured and Prudential Core

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

The idea behind Blackstone Secured Lending and Prudential Core Conservative 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.

Check out your portfolio center.

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 Efficient Frontier module to plot and analyze your portfolio and positions against risk-return landscape of the market..