Correlation Between Blackstone Loan and Morgan Advanced

Can any of the company-specific risk be diversified away by investing in both Blackstone Loan and Morgan Advanced 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 Morgan Advanced 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 Morgan Advanced Materials, you can compare the effects of market volatilities on Blackstone Loan and Morgan Advanced 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 Morgan Advanced. Check out your portfolio center. Please also check ongoing floating volatility patterns of Blackstone Loan and Morgan Advanced.

Diversification Opportunities for Blackstone Loan and Morgan Advanced

0.06

Correlation Coefficient

Blackstone Loan  Morgan Advanced

Significant diversification

The 3 months correlation between Blackstone and Morgan is 0.06. Overlapping area represents the amount of risk that can be diversified away by holding Blackstone Loan Financing and Morgan Advanced Materials in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Morgan Advanced Materials 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 Morgan Advanced. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Morgan Advanced Materials has no effect on the direction of Blackstone Loan i.e., Blackstone Loan and Morgan Advanced go up and down completely randomly.

Pair Corralation between Blackstone Loan and Morgan Advanced

Assuming the 90 days trading horizon Blackstone Loan Financing is expected to generate 0.89 times more return on investment than Morgan Advanced. However, Blackstone Loan Financing is 1.12 times less risky than Morgan Advanced. It trades about 0.16 of its potential returns per unit of risk. Morgan Advanced Materials is currently generating about -0.06 per unit of risk. If you would invest  5,698  in Blackstone Loan Financing on September 13, 2024 and sell it today you would earn a total of  702.00  from holding Blackstone Loan Financing or generate 12.32% 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.  Morgan Advanced Materials

Blackstone Loan Financing

Risk-Adjusted Performance

12 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Blackstone Loan Financing are ranked lower than 12 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain basic indicators, Blackstone Loan may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Morgan Advanced Materials

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Morgan Advanced Materials has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable basic indicators, Morgan Advanced is not utilizing all of its potentials. The newest stock price uproar, may contribute to short-horizon losses for the private investors.

Pair Trading with Blackstone Loan and Morgan Advanced

The main advantage of trading using opposite Blackstone Loan and Morgan Advanced positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Blackstone Loan position performs unexpectedly, Morgan Advanced 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 Morgan Advanced will offset losses from the drop in Morgan Advanced's long position.

The idea behind Blackstone Loan Financing and Morgan Advanced Materials 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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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 Competition Analyzer module to analyze and compare many basic indicators for a group of related or unrelated entities.