Correlation Between Blackstone Alternative and Franklin

Can any of the company-specific risk be diversified away by investing in both Blackstone Alternative and Franklin 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 Franklin 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 Franklin K2 Alternative, you can compare the effects of market volatilities on Blackstone Alternative and Franklin 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 Franklin. Check out your portfolio center. Please also check ongoing floating volatility patterns of Blackstone Alternative and Franklin.

Diversification Opportunities for Blackstone Alternative and Franklin

0.99

Correlation Coefficient

Blackstone Alternative  Franklin

No risk reduction

The 3 months correlation between Blackstone and Franklin is 0.99. Overlapping area represents the amount of risk that can be diversified away by holding Blackstone Alternative Multi S and Franklin K2 Alternative in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Franklin K2 Alternative 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 Franklin. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Franklin K2 Alternative has no effect on the direction of Blackstone Alternative i.e., Blackstone Alternative and Franklin go up and down completely randomly.

Pair Corralation between Blackstone Alternative and Franklin

Assuming the 90 days horizon Blackstone Alternative Multi Strategy is expected to generate 2.12 times more return on investment than Franklin. However, Blackstone Alternative is 2.12 times more volatile than Franklin K2 Alternative. It trades about 0.12 of its potential returns per unit of risk. Franklin K2 Alternative is currently generating about 0.16 per unit of risk. If you would invest  983.00  in Blackstone Alternative Multi Strategy on January 26, 2024 and sell it today you would earn a total of  105.00  from holding Blackstone Alternative Multi Strategy or generate 10.68% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Strong
Accuracy	100.0%
Values	Daily Returns

Blackstone Alternative Multi S  vs.  Franklin K2 Alternative

Blackstone Alternative

Risk-Adjusted Performance

21 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Blackstone Alternative Multi Strategy are ranked lower than 21 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong forward indicators, Blackstone Alternative is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Franklin K2 Alternative

Risk-Adjusted Performance

24 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Franklin K2 Alternative are ranked lower than 24 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong basic indicators, Franklin is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Blackstone Alternative and Franklin

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

The idea behind Blackstone Alternative Multi Strategy and Franklin K2 Alternative 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 Portfolio Dashboard module to portfolio dashboard that provides centralized access to all your investments.