Correlation Between Aeorema Communications and Blackstone Loan
Can any of the company-specific risk be diversified away by investing in both Aeorema Communications 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 Aeorema Communications and Blackstone Loan into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Aeorema Communications Plc and Blackstone Loan Financing, you can compare the effects of market volatilities on Aeorema Communications 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 Aeorema Communications with a short position of Blackstone Loan. Check out your portfolio center. Please also check ongoing floating volatility patterns of Aeorema Communications and Blackstone Loan.
Diversification Opportunities for Aeorema Communications and Blackstone Loan
-0.21 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Aeorema and Blackstone is -0.21. Overlapping area represents the amount of risk that can be diversified away by holding Aeorema Communications Plc 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 Aeorema Communications 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 Aeorema Communications Plc 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 Aeorema Communications i.e., Aeorema Communications and Blackstone Loan go up and down completely randomly.
Pair Corralation between Aeorema Communications and Blackstone Loan
Assuming the 90 days trading horizon Aeorema Communications is expected to generate 3.3 times less return on investment than Blackstone Loan. But when comparing it to its historical volatility, Aeorema Communications Plc is 1.04 times less risky than Blackstone Loan. It trades about 0.1 of its potential returns per unit of risk. Blackstone Loan Financing is currently generating about 0.32 of returns per unit of risk over similar time horizon. If you would invest 5,698 in Blackstone Loan Financing on August 28, 2024 and sell it today you would earn a total of 802.00 from holding Blackstone Loan Financing or generate 14.08% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Aeorema Communications Plc vs. Blackstone Loan Financing
Performance |
| Timeline |
| Aeorema Communications |
| Blackstone Loan Financing |
Aeorema Communications and Blackstone Loan Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Aeorema Communications and Blackstone Loan
The main advantage of trading using opposite Aeorema Communications and Blackstone Loan positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Aeorema Communications 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.| Aeorema Communications vs. Samsung Electronics Co | Aeorema Communications vs. Samsung Electronics Co | Aeorema Communications vs. Hyundai Motor | Aeorema Communications vs. Toyota Motor Corp |
| Blackstone Loan vs. Samsung Electronics Co | Blackstone Loan vs. Samsung Electronics Co | Blackstone Loan vs. Hyundai Motor | Blackstone Loan vs. Toyota Motor Corp |
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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.
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