Correlation Between Pabrai Wagons and Blackstone Gso

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Can any of the company-specific risk be diversified away by investing in both Pabrai Wagons and Blackstone Gso 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 Pabrai Wagons and Blackstone Gso into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Pabrai Wagons Institutional and Blackstone Gso Floating, you can compare the effects of market volatilities on Pabrai Wagons and Blackstone Gso 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 Pabrai Wagons with a short position of Blackstone Gso. Check out your portfolio center. Please also check ongoing floating volatility patterns of Pabrai Wagons and Blackstone Gso.

Diversification Opportunities for Pabrai Wagons and Blackstone Gso

-0.5
  Correlation Coefficient

Very good diversification

The 3 months correlation between Pabrai and Blackstone is -0.5. Overlapping area represents the amount of risk that can be diversified away by holding Pabrai Wagons Institutional and Blackstone Gso Floating in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Blackstone Gso Floating and Pabrai Wagons 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 Pabrai Wagons Institutional are associated (or correlated) with Blackstone Gso. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Blackstone Gso Floating has no effect on the direction of Pabrai Wagons i.e., Pabrai Wagons and Blackstone Gso go up and down completely randomly.

Pair Corralation between Pabrai Wagons and Blackstone Gso

Assuming the 90 days horizon Pabrai Wagons Institutional is expected to generate 0.26 times more return on investment than Blackstone Gso. However, Pabrai Wagons Institutional is 3.92 times less risky than Blackstone Gso. It trades about 0.04 of its potential returns per unit of risk. Blackstone Gso Floating is currently generating about -0.04 per unit of risk. If you would invest  1,018  in Pabrai Wagons Institutional on October 9, 2024 and sell it today you would earn a total of  149.00  from holding Pabrai Wagons Institutional or generate 14.64% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Against 
StrengthVery Weak
Accuracy77.94%
ValuesDaily Returns

Pabrai Wagons Institutional  vs.  Blackstone Gso Floating

 Performance 
       Timeline  
Pabrai Wagons Instit 

Risk-Adjusted Performance

0 of 100

 
Weak
 
Strong
Very Weak
Over the last 90 days Pabrai Wagons Institutional has generated negative risk-adjusted returns adding no value to fund investors. In spite of fairly strong forward indicators, Pabrai Wagons is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.
Blackstone Gso Floating 

Risk-Adjusted Performance

0 of 100

 
Weak
 
Strong
Very Weak
Over the last 90 days Blackstone Gso Floating has generated negative risk-adjusted returns adding no value to fund investors. In spite of fairly strong essential indicators, Blackstone Gso is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pabrai Wagons and Blackstone Gso Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Pabrai Wagons and Blackstone Gso

The main advantage of trading using opposite Pabrai Wagons and Blackstone Gso positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Pabrai Wagons position performs unexpectedly, Blackstone Gso 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 Blackstone Gso will offset losses from the drop in Blackstone Gso's long position.
The idea behind Pabrai Wagons Institutional and Blackstone Gso Floating 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.
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 Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.

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