Correlation Between Extra Space and Blackstone Loan
Can any of the company-specific risk be diversified away by investing in both Extra Space 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 Extra Space and Blackstone Loan into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Extra Space Storage and Blackstone Loan Financing, you can compare the effects of market volatilities on Extra Space 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 Extra Space with a short position of Blackstone Loan. Check out your portfolio center. Please also check ongoing floating volatility patterns of Extra Space and Blackstone Loan.
Diversification Opportunities for Extra Space and Blackstone Loan
-0.4 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Extra and Blackstone is -0.4. Overlapping area represents the amount of risk that can be diversified away by holding Extra Space Storage 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 Extra Space 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 Extra Space Storage 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 Extra Space i.e., Extra Space and Blackstone Loan go up and down completely randomly.
Pair Corralation between Extra Space and Blackstone Loan
Assuming the 90 days trading horizon Extra Space Storage is expected to under-perform the Blackstone Loan. But the stock apears to be less risky and, when comparing its historical volatility, Extra Space Storage is 1.01 times less risky than Blackstone Loan. The stock trades about -0.09 of its potential returns per unit of risk. The Blackstone Loan Financing is currently generating about 0.17 of returns per unit of risk over similar time horizon. If you would invest 6,100 in Blackstone Loan Financing on September 14, 2024 and sell it today you would earn a total of 300.00 from holding Blackstone Loan Financing or generate 4.92% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Extra Space Storage vs. Blackstone Loan Financing
Performance |
| Timeline |
| Extra Space Storage |
| Blackstone Loan Financing |
Extra Space and Blackstone Loan Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Extra Space and Blackstone Loan
The main advantage of trading using opposite Extra Space and Blackstone Loan positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Extra Space 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.| Extra Space vs. Ross Stores | Extra Space vs. Bisichi Mining PLC | Extra Space vs. Hochschild Mining plc | Extra Space vs. AMG Advanced Metallurgical |
| Blackstone Loan vs. Samsung Electronics Co | Blackstone Loan vs. Samsung Electronics Co | Blackstone Loan vs. Hyundai Motor | Blackstone Loan vs. Reliance Industries Ltd |
Check out your portfolio center.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 Price Ceiling Movement module to calculate and plot Price Ceiling Movement for different equity instruments.
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