Correlation Between First Trust and Blackstone Gso

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

By analyzing existing cross correlation between First Trust Senior and Blackstone Gso Senior, you can compare the effects of market volatilities on First Trust and Blackstone Gso 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 First Trust with a short position of Blackstone Gso. Check out your portfolio center. Please also check ongoing floating volatility patterns of First Trust and Blackstone Gso.

Diversification Opportunities for First Trust and Blackstone Gso

0.16

Correlation Coefficient

First Trust  Blackstone Gso

Average diversification

The 3 months correlation between First and Blackstone is 0.16. Overlapping area represents the amount of risk that can be diversified away by holding First Trust Senior and Blackstone Gso Senior in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Blackstone Gso Senior and First Trust 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 First Trust Senior are associated (or correlated) with Blackstone Gso. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Blackstone Gso Senior has no effect on the direction of First Trust i.e., First Trust and Blackstone Gso go up and down completely randomly.

Pair Corralation between First Trust and Blackstone Gso

Considering the 90-day investment horizon First Trust Senior is expected to generate 1.07 times more return on investment than Blackstone Gso. However, First Trust is 1.07 times more volatile than Blackstone Gso Senior. It trades about 0.0 of its potential returns per unit of risk. Blackstone Gso Senior is currently generating about -0.02 per unit of risk. If you would invest  1,018  in First Trust Senior on December 29, 2024 and sell it today you would lose (1.00) from holding First Trust Senior or give up 0.1% of portfolio value over 90 days.

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

First Trust Senior  vs.  Blackstone Gso Senior

First Trust Senior

Risk-Adjusted Performance

Very Weak

Over the last 90 days First Trust Senior has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable fundamental indicators, First Trust is not utilizing all of its potentials. The current stock price uproar, may contribute to short-horizon losses for the private investors.

Blackstone Gso Senior

Risk-Adjusted Performance

Very Weak

Over the last 90 days Blackstone Gso Senior has generated negative risk-adjusted returns adding no value to fund investors. Despite quite persistent basic indicators, Blackstone Gso is not utilizing all of its potentials. The newest stock price mess, may contribute to short-term losses for the institutional investors.

Pair Trading with First Trust and Blackstone Gso

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

The idea behind First Trust Senior and Blackstone Gso Senior 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 Bollinger Bands module to use Bollinger Bands indicator to analyze target price for a given investing horizon.