Correlation Between Monks Investment and Blackstone Loan

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

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

Diversification Opportunities for Monks Investment and Blackstone Loan

0.93

Correlation Coefficient

Monks Investment  Blackstone Loan

Almost no diversification

The 3 months correlation between Monks and Blackstone is 0.93. Overlapping area represents the amount of risk that can be diversified away by holding Monks Investment Trust and Blackstone Loan Financing in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Blackstone Loan Financing and Monks Investment 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 Monks Investment Trust are associated (or correlated) with Blackstone Loan. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Blackstone Loan Financing has no effect on the direction of Monks Investment i.e., Monks Investment and Blackstone Loan go up and down completely randomly.

Pair Corralation between Monks Investment and Blackstone Loan

Assuming the 90 days trading horizon Monks Investment is expected to generate 1.7 times less return on investment than Blackstone Loan. But when comparing it to its historical volatility, Monks Investment Trust is 1.27 times less risky than Blackstone Loan. It trades about 0.05 of its potential returns per unit of risk. Blackstone Loan Financing is currently generating about 0.07 of returns per unit of risk over similar time horizon. If you would invest  6,300  in Blackstone Loan Financing on September 21, 2024 and sell it today you would earn a total of  100.00  from holding Blackstone Loan Financing or generate 1.59% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Strong
Accuracy	95.65%
Values	Daily Returns

Monks Investment Trust  vs.  Blackstone Loan Financing

Monks Investment Trust

Risk-Adjusted Performance

12 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Monks Investment Trust are ranked lower than 12 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively unsteady basic indicators, Monks Investment may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Blackstone Loan Financing

Risk-Adjusted Performance

12 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Blackstone Loan Financing are ranked lower than 12 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain basic indicators, Blackstone Loan may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Pair Trading with Monks Investment and Blackstone Loan

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

The idea behind Monks Investment Trust and Blackstone Loan Financing 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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.