Correlation Between Blackstone Loan and Ally Financial
Can any of the company-specific risk be diversified away by investing in both Blackstone Loan and Ally Financial 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 Blackstone Loan and Ally Financial into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Blackstone Loan Financing and Ally Financial, you can compare the effects of market volatilities on Blackstone Loan and Ally Financial 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 Blackstone Loan with a short position of Ally Financial. Check out your portfolio center. Please also check ongoing floating volatility patterns of Blackstone Loan and Ally Financial.
Diversification Opportunities for Blackstone Loan and Ally Financial
0.85 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Blackstone and Ally is 0.85. Overlapping area represents the amount of risk that can be diversified away by holding Blackstone Loan Financing and Ally Financial in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ally Financial and Blackstone Loan 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 Blackstone Loan Financing are associated (or correlated) with Ally Financial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ally Financial has no effect on the direction of Blackstone Loan i.e., Blackstone Loan and Ally Financial go up and down completely randomly.
Pair Corralation between Blackstone Loan and Ally Financial
Assuming the 90 days trading horizon Blackstone Loan Financing is expected to generate 0.76 times more return on investment than Ally Financial. However, Blackstone Loan Financing is 1.32 times less risky than Ally Financial. It trades about 0.17 of its potential returns per unit of risk. Ally Financial is currently generating about 0.09 per unit of risk. 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 Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Blackstone Loan Financing vs. Ally Financial
Performance |
| Timeline |
| Blackstone Loan Financing |
| Ally Financial |
Blackstone Loan and Ally Financial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Blackstone Loan and Ally Financial
The main advantage of trading using opposite Blackstone Loan and Ally Financial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Blackstone Loan position performs unexpectedly, Ally Financial 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 Ally Financial will offset losses from the drop in Ally Financial's long position.| Blackstone Loan vs. Samsung Electronics Co | Blackstone Loan vs. Samsung Electronics Co | Blackstone Loan vs. Hyundai Motor | Blackstone Loan vs. Reliance Industries Ltd |
| Ally Financial vs. Cars Inc | Ally Financial vs. Caledonia Mining | Ally Financial vs. CAP LEASE AVIATION | Ally Financial vs. Atalaya Mining |
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 FinTech Suite module to use AI to screen and filter profitable investment opportunities.
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