Correlation Between Blackstone Alternative and Absolute Strategies
Can any of the company-specific risk be diversified away by investing in both Blackstone Alternative and Absolute Strategies 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 Alternative and Absolute Strategies into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Blackstone Alternative Multi Strategy and Absolute Strategies Fund, you can compare the effects of market volatilities on Blackstone Alternative and Absolute Strategies 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 Alternative with a short position of Absolute Strategies. Check out your portfolio center. Please also check ongoing floating volatility patterns of Blackstone Alternative and Absolute Strategies.
Diversification Opportunities for Blackstone Alternative and Absolute Strategies
-0.67 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Blackstone and Absolute is -0.67. Overlapping area represents the amount of risk that can be diversified away by holding Blackstone Alternative Multi S and Absolute Strategies Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Absolute Strategies and Blackstone Alternative 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 Alternative Multi Strategy are associated (or correlated) with Absolute Strategies. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Absolute Strategies has no effect on the direction of Blackstone Alternative i.e., Blackstone Alternative and Absolute Strategies go up and down completely randomly.
Pair Corralation between Blackstone Alternative and Absolute Strategies
Assuming the 90 days horizon Blackstone Alternative Multi Strategy is expected to generate 3.02 times more return on investment than Absolute Strategies. However, Blackstone Alternative is 3.02 times more volatile than Absolute Strategies Fund. It trades about 0.23 of its potential returns per unit of risk. Absolute Strategies Fund is currently generating about -0.41 per unit of risk. If you would invest 1,107 in Blackstone Alternative Multi Strategy on August 28, 2024 and sell it today you would earn a total of 11.00 from holding Blackstone Alternative Multi Strategy or generate 0.99% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 28.57% |
| Values | Daily Returns |
Blackstone Alternative Multi S vs. Absolute Strategies Fund
Performance |
| Timeline |
| Blackstone Alternative |
| Absolute Strategies |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Blackstone Alternative and Absolute Strategies Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Blackstone Alternative and Absolute Strategies
The main advantage of trading using opposite Blackstone Alternative and Absolute Strategies positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Blackstone Alternative position performs unexpectedly, Absolute Strategies 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 Absolute Strategies will offset losses from the drop in Absolute Strategies' long position.The idea behind Blackstone Alternative Multi Strategy and Absolute Strategies Fund pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.
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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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.
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