Correlation Between Blackstone Loan and Caffyns PLC
Can any of the company-specific risk be diversified away by investing in both Blackstone Loan and Caffyns PLC 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 Caffyns PLC 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 Caffyns PLC, you can compare the effects of market volatilities on Blackstone Loan and Caffyns PLC 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 Caffyns PLC. Check out your portfolio center. Please also check ongoing floating volatility patterns of Blackstone Loan and Caffyns PLC.
Diversification Opportunities for Blackstone Loan and Caffyns PLC
-0.16 | Correlation Coefficient |
Good diversification
The 3 months correlation between Blackstone and Caffyns is -0.16. Overlapping area represents the amount of risk that can be diversified away by holding Blackstone Loan Financing and Caffyns PLC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Caffyns PLC 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 Caffyns PLC. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Caffyns PLC has no effect on the direction of Blackstone Loan i.e., Blackstone Loan and Caffyns PLC go up and down completely randomly.
Pair Corralation between Blackstone Loan and Caffyns PLC
Assuming the 90 days trading horizon Blackstone Loan Financing is expected to generate 1.68 times more return on investment than Caffyns PLC. However, Blackstone Loan is 1.68 times more volatile than Caffyns PLC. It trades about 0.3 of its potential returns per unit of risk. Caffyns PLC is currently generating about -0.21 per unit of risk. If you would invest 5,698 in Blackstone Loan Financing on August 29, 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 |
Blackstone Loan Financing vs. Caffyns PLC
Performance |
| Timeline |
| Blackstone Loan Financing |
| Caffyns PLC |
Blackstone Loan and Caffyns PLC Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Blackstone Loan and Caffyns PLC
The main advantage of trading using opposite Blackstone Loan and Caffyns PLC positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Blackstone Loan position performs unexpectedly, Caffyns PLC 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 Caffyns PLC will offset losses from the drop in Caffyns PLC's long position.| Blackstone Loan vs. Lendinvest PLC | Blackstone Loan vs. Neometals | Blackstone Loan vs. Albion Technology General | Blackstone Loan vs. Jupiter Fund Management |
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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 Portfolio Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.
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