Correlation Between Yamaha and Blackstone Mortgage

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

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

Diversification Opportunities for Yamaha and Blackstone Mortgage

-0.59

Correlation Coefficient

Yamaha  Blackstone Mortgage

Excellent diversification

The 3 months correlation between Yamaha and Blackstone is -0.59. Overlapping area represents the amount of risk that can be diversified away by holding Yamaha and Blackstone Mortgage Trust in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Blackstone Mortgage Trust and Yamaha 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 Yamaha are associated (or correlated) with Blackstone Mortgage. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Blackstone Mortgage Trust has no effect on the direction of Yamaha i.e., Yamaha and Blackstone Mortgage go up and down completely randomly.

Pair Corralation between Yamaha and Blackstone Mortgage

Assuming the 90 days horizon Yamaha is expected to under-perform the Blackstone Mortgage. In addition to that, Yamaha is 1.63 times more volatile than Blackstone Mortgage Trust. It trades about -0.09 of its total potential returns per unit of risk. Blackstone Mortgage Trust is currently generating about 0.12 per unit of volatility. If you would invest  1,558  in Blackstone Mortgage Trust on October 10, 2024 and sell it today you would earn a total of  183.00  from holding Blackstone Mortgage Trust or generate 11.75% return on investment over 90 days.

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

Yamaha  vs.  Blackstone Mortgage Trust

Yamaha

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Yamaha has generated negative risk-adjusted returns adding no value to investors with long positions. Despite fragile performance in the last few months, the Stock's basic indicators remain nearly stable which may send shares a bit higher in February 2025. The current disturbance may also be a sign of long-run up-swing for the company stockholders.

Blackstone Mortgage Trust

Risk-Adjusted Performance

9 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Blackstone Mortgage Trust are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. Despite nearly unsteady basic indicators, Blackstone Mortgage reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Yamaha and Blackstone Mortgage

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

The idea behind Yamaha and Blackstone Mortgage Trust 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 Equity Valuation module to check real value of public entities based on technical and fundamental data.