Correlation Between Ares Management and SQUIRREL MEDIA
Can any of the company-specific risk be diversified away by investing in both Ares Management and SQUIRREL MEDIA 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 Ares Management and SQUIRREL MEDIA into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Ares Management Corp and SQUIRREL MEDIA SA, you can compare the effects of market volatilities on Ares Management and SQUIRREL MEDIA 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 Ares Management with a short position of SQUIRREL MEDIA. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ares Management and SQUIRREL MEDIA.
Diversification Opportunities for Ares Management and SQUIRREL MEDIA
-0.61 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Ares and SQUIRREL is -0.61. Overlapping area represents the amount of risk that can be diversified away by holding Ares Management Corp and SQUIRREL MEDIA SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SQUIRREL MEDIA SA and Ares Management 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 Ares Management Corp are associated (or correlated) with SQUIRREL MEDIA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SQUIRREL MEDIA SA has no effect on the direction of Ares Management i.e., Ares Management and SQUIRREL MEDIA go up and down completely randomly.
Pair Corralation between Ares Management and SQUIRREL MEDIA
Assuming the 90 days horizon Ares Management is expected to generate 6.99 times less return on investment than SQUIRREL MEDIA. But when comparing it to its historical volatility, Ares Management Corp is 1.11 times less risky than SQUIRREL MEDIA. It trades about 0.05 of its potential returns per unit of risk. SQUIRREL MEDIA SA is currently generating about 0.31 of returns per unit of risk over similar time horizon. If you would invest 122.00 in SQUIRREL MEDIA SA on October 13, 2024 and sell it today you would earn a total of 16.00 from holding SQUIRREL MEDIA SA or generate 13.11% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Ares Management Corp vs. SQUIRREL MEDIA SA
Performance |
| Timeline |
| Ares Management Corp |
| SQUIRREL MEDIA SA |
Ares Management and SQUIRREL MEDIA Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ares Management and SQUIRREL MEDIA
The main advantage of trading using opposite Ares Management and SQUIRREL MEDIA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ares Management position performs unexpectedly, SQUIRREL MEDIA 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 SQUIRREL MEDIA will offset losses from the drop in SQUIRREL MEDIA's long position.| Ares Management vs. Penn National Gaming | Ares Management vs. Calibre Mining Corp | Ares Management vs. Sixt Leasing SE | Ares Management vs. FUYO GENERAL LEASE |
| SQUIRREL MEDIA vs. Ares Management Corp | SQUIRREL MEDIA vs. Charter Communications | SQUIRREL MEDIA vs. Ribbon Communications | SQUIRREL MEDIA vs. Cairo Communication SpA |
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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.
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