Correlation Between Arbor Realty and Blackstone Mortgage
Can any of the company-specific risk be diversified away by investing in both Arbor Realty 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 Arbor Realty and Blackstone Mortgage into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Arbor Realty Trust and Blackstone Mortgage Trust, you can compare the effects of market volatilities on Arbor Realty 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 Arbor Realty with a short position of Blackstone Mortgage. Check out your portfolio center. Please also check ongoing floating volatility patterns of Arbor Realty and Blackstone Mortgage.
Diversification Opportunities for Arbor Realty and Blackstone Mortgage
0.5 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Arbor and Blackstone is 0.5. Overlapping area represents the amount of risk that can be diversified away by holding Arbor Realty Trust 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 Arbor Realty 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 Arbor Realty Trust 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 Arbor Realty i.e., Arbor Realty and Blackstone Mortgage go up and down completely randomly.
Pair Corralation between Arbor Realty and Blackstone Mortgage
Considering the 90-day investment horizon Arbor Realty is expected to generate 3.56 times less return on investment than Blackstone Mortgage. But when comparing it to its historical volatility, Arbor Realty Trust is 1.3 times less risky than Blackstone Mortgage. It trades about 0.04 of its potential returns per unit of risk. Blackstone Mortgage Trust is currently generating about 0.12 of returns per unit of risk over similar time horizon. If you would invest 1,851 in Blackstone Mortgage Trust on August 30, 2024 and sell it today you would earn a total of 73.00 from holding Blackstone Mortgage Trust or generate 3.94% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Arbor Realty Trust vs. Blackstone Mortgage Trust
Performance |
| Timeline |
| Arbor Realty Trust |
| Blackstone Mortgage Trust |
Arbor Realty and Blackstone Mortgage Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Arbor Realty and Blackstone Mortgage
The main advantage of trading using opposite Arbor Realty and Blackstone Mortgage positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Arbor Realty 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.| Arbor Realty vs. Starwood Property Trust | Arbor Realty vs. Ready Capital Corp | Arbor Realty vs. Two Harbors Investments | Arbor Realty vs. AGNC Investment Corp |
| Blackstone Mortgage vs. Starwood Property Trust | Blackstone Mortgage vs. Rithm Capital Corp | Blackstone Mortgage vs. AGNC Investment Corp | Blackstone Mortgage vs. Ares Commercial Real |
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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.
Other Complementary Tools
| Earnings Calls Check upcoming earnings announcements updated hourly across public exchanges | |
| Commodity Directory Find actively traded commodities issued by global exchanges | |
| Portfolio Rebalancing Analyze risk-adjusted returns against different time horizons to find asset-allocation targets | |
| Idea Optimizer Use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio | |
| Global Correlations Find global opportunities by holding instruments from different markets |