Correlation Between Blackstone Loan and Nationwide Building
Can any of the company-specific risk be diversified away by investing in both Blackstone Loan and Nationwide Building 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 Nationwide Building 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 Nationwide Building Society, you can compare the effects of market volatilities on Blackstone Loan and Nationwide Building 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 Nationwide Building. Check out your portfolio center. Please also check ongoing floating volatility patterns of Blackstone Loan and Nationwide Building.
Diversification Opportunities for Blackstone Loan and Nationwide Building
0.09 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Blackstone and Nationwide is 0.09. Overlapping area represents the amount of risk that can be diversified away by holding Blackstone Loan Financing and Nationwide Building Society in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nationwide Building 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 Nationwide Building. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Nationwide Building has no effect on the direction of Blackstone Loan i.e., Blackstone Loan and Nationwide Building go up and down completely randomly.
Pair Corralation between Blackstone Loan and Nationwide Building
Assuming the 90 days trading horizon Blackstone Loan Financing is expected to generate 3.0 times more return on investment than Nationwide Building. However, Blackstone Loan is 3.0 times more volatile than Nationwide Building Society. It trades about 0.09 of its potential returns per unit of risk. Nationwide Building Society is currently generating about 0.15 per unit of risk. If you would invest 4,941 in Blackstone Loan Financing on September 4, 2024 and sell it today you would earn a total of 1,559 from holding Blackstone Loan Financing or generate 31.55% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Blackstone Loan Financing vs. Nationwide Building Society
Performance |
| Timeline |
| Blackstone Loan Financing |
| Nationwide Building |
Blackstone Loan and Nationwide Building Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Blackstone Loan and Nationwide Building
The main advantage of trading using opposite Blackstone Loan and Nationwide Building positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Blackstone Loan position performs unexpectedly, Nationwide Building 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 Nationwide Building will offset losses from the drop in Nationwide Building's long position.| Blackstone Loan vs. Take Two Interactive Software | Blackstone Loan vs. Supermarket Income REIT | Blackstone Loan vs. Tyson Foods Cl | Blackstone Loan vs. Roadside Real Estate |
| Nationwide Building vs. Centaur Media | Nationwide Building vs. JD Sports Fashion | Nationwide Building vs. LBG Media PLC | Nationwide Building vs. Everyman Media Group |
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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.
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