Correlation Between Direxion Monthly and Blackstone Alternative

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

By analyzing existing cross correlation between Direxion Monthly Nasdaq 100 and Blackstone Alternative Multi Strategy, you can compare the effects of market volatilities on Direxion Monthly and Blackstone Alternative 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 Direxion Monthly with a short position of Blackstone Alternative. Check out your portfolio center. Please also check ongoing floating volatility patterns of Direxion Monthly and Blackstone Alternative.

Diversification Opportunities for Direxion Monthly and Blackstone Alternative

0.41

Correlation Coefficient

Direxion Monthly  Blackstone Alternative

Very weak diversification

The 3 months correlation between Direxion and Blackstone is 0.41. Overlapping area represents the amount of risk that can be diversified away by holding Direxion Monthly Nasdaq 100 and Blackstone Alternative Multi S in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Blackstone Alternative and Direxion Monthly 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 Direxion Monthly Nasdaq 100 are associated (or correlated) with Blackstone Alternative. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Blackstone Alternative has no effect on the direction of Direxion Monthly i.e., Direxion Monthly and Blackstone Alternative go up and down completely randomly.

Pair Corralation between Direxion Monthly and Blackstone Alternative

Assuming the 90 days horizon Direxion Monthly Nasdaq 100 is expected to under-perform the Blackstone Alternative. In addition to that, Direxion Monthly is 13.78 times more volatile than Blackstone Alternative Multi Strategy. It trades about -0.11 of its total potential returns per unit of risk. Blackstone Alternative Multi Strategy is currently generating about 0.08 per unit of volatility. If you would invest  1,069  in Blackstone Alternative Multi Strategy on December 30, 2024 and sell it today you would earn a total of  10.00  from holding Blackstone Alternative Multi Strategy or generate 0.94% return on investment over 90 days.

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

Direxion Monthly Nasdaq 100  vs.  Blackstone Alternative Multi S

Direxion Monthly Nasdaq

Risk-Adjusted Performance

Very Weak

Over the last 90 days Direxion Monthly Nasdaq 100 has generated negative risk-adjusted returns adding no value to fund investors. In spite of weak performance in the last few months, the Fund's essential indicators remain fairly strong which may send shares a bit higher in April 2025. The current disturbance may also be a sign of long term up-swing for the fund investors.

Blackstone Alternative

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Blackstone Alternative Multi Strategy are ranked lower than 6 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong forward indicators, Blackstone Alternative is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Direxion Monthly and Blackstone Alternative

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

The idea behind Direxion Monthly Nasdaq 100 and Blackstone Alternative Multi Strategy 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 Idea Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.