Correlation Between Blackstone Mortgage and Starwood Property
Can any of the company-specific risk be diversified away by investing in both Blackstone Mortgage and Starwood Property 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 Mortgage and Starwood Property into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Blackstone Mortgage Trust and Starwood Property Trust, you can compare the effects of market volatilities on Blackstone Mortgage and Starwood Property 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 Mortgage with a short position of Starwood Property. Check out your portfolio center. Please also check ongoing floating volatility patterns of Blackstone Mortgage and Starwood Property.
Diversification Opportunities for Blackstone Mortgage and Starwood Property
0.44 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Blackstone and Starwood is 0.44. Overlapping area represents the amount of risk that can be diversified away by holding Blackstone Mortgage Trust and Starwood Property Trust in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Starwood Property Trust and Blackstone Mortgage 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 Mortgage Trust are associated (or correlated) with Starwood Property. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Starwood Property Trust has no effect on the direction of Blackstone Mortgage i.e., Blackstone Mortgage and Starwood Property go up and down completely randomly.
Pair Corralation between Blackstone Mortgage and Starwood Property
Given the investment horizon of 90 days Blackstone Mortgage is expected to generate 2.19 times less return on investment than Starwood Property. In addition to that, Blackstone Mortgage is 1.24 times more volatile than Starwood Property Trust. It trades about 0.01 of its total potential returns per unit of risk. Starwood Property Trust is currently generating about 0.03 per unit of volatility. If you would invest 1,668 in Starwood Property Trust on August 24, 2024 and sell it today you would earn a total of 323.00 from holding Starwood Property Trust or generate 19.36% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Blackstone Mortgage Trust vs. Starwood Property Trust
Performance |
| Timeline |
| Blackstone Mortgage Trust |
| Starwood Property Trust |
Blackstone Mortgage and Starwood Property Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Blackstone Mortgage and Starwood Property
The main advantage of trading using opposite Blackstone Mortgage and Starwood Property positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Blackstone Mortgage position performs unexpectedly, Starwood Property 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 Starwood Property will offset losses from the drop in Starwood Property's long position.| Blackstone Mortgage vs. Starwood Property Trust | Blackstone Mortgage vs. Rithm Capital Corp | Blackstone Mortgage vs. AGNC Investment Corp | Blackstone Mortgage vs. Ares Commercial Real |
| Starwood Property vs. Blackstone Mortgage Trust | Starwood Property vs. Arbor Realty Trust | Starwood Property vs. Apollo Commercial Real | Starwood Property vs. Omega Healthcare Investors |
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 Dashboard module to portfolio dashboard that provides centralized access to all your investments.
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