Correlation Between Roadside Real and Blackstone Loan

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

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

Diversification Opportunities for Roadside Real and Blackstone Loan

0.71

Correlation Coefficient

Roadside Real  Blackstone Loan

Poor diversification

The 3 months correlation between Roadside and Blackstone is 0.71. Overlapping area represents the amount of risk that can be diversified away by holding Roadside Real Estate 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 Roadside Real 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 Roadside Real Estate 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 Roadside Real i.e., Roadside Real and Blackstone Loan go up and down completely randomly.

Pair Corralation between Roadside Real and Blackstone Loan

Assuming the 90 days trading horizon Roadside Real Estate is expected to generate 1.67 times more return on investment than Blackstone Loan. However, Roadside Real is 1.67 times more volatile than Blackstone Loan Financing. It trades about 0.33 of its potential returns per unit of risk. Blackstone Loan Financing is currently generating about 0.18 per unit of risk. If you would invest  2,120  in Roadside Real Estate on September 5, 2024 and sell it today you would earn a total of  1,080  from holding Roadside Real Estate or generate 50.94% return on investment over 90 days.

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

Roadside Real Estate  vs.  Blackstone Loan Financing

Roadside Real Estate

Risk-Adjusted Performance

26 of 100

Strong

Compared to the overall equity markets, risk-adjusted returns on investments in Roadside Real Estate are ranked lower than 26 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively unsteady basic indicators, Roadside Real unveiled solid returns over the last few months and may actually be approaching a breakup point.

Blackstone Loan Financing

Risk-Adjusted Performance

14 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Blackstone Loan Financing are ranked lower than 14 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain basic indicators, Blackstone Loan unveiled solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Roadside Real and Blackstone Loan

The main advantage of trading using opposite Roadside Real and Blackstone Loan positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Roadside Real 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 Roadside Real Estate 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.