Correlation Between Ares Management and PEPTONIC MEDICAL
Can any of the company-specific risk be diversified away by investing in both Ares Management and PEPTONIC MEDICAL 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 PEPTONIC MEDICAL 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 PEPTONIC MEDICAL, you can compare the effects of market volatilities on Ares Management and PEPTONIC MEDICAL 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 PEPTONIC MEDICAL. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ares Management and PEPTONIC MEDICAL.
Diversification Opportunities for Ares Management and PEPTONIC MEDICAL
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Ares and PEPTONIC is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Ares Management Corp and PEPTONIC MEDICAL in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on PEPTONIC MEDICAL 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 PEPTONIC MEDICAL. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of PEPTONIC MEDICAL has no effect on the direction of Ares Management i.e., Ares Management and PEPTONIC MEDICAL go up and down completely randomly.
Pair Corralation between Ares Management and PEPTONIC MEDICAL
Assuming the 90 days horizon Ares Management is expected to generate 17.63 times less return on investment than PEPTONIC MEDICAL. But when comparing it to its historical volatility, Ares Management Corp is 33.2 times less risky than PEPTONIC MEDICAL. It trades about 0.11 of its potential returns per unit of risk. PEPTONIC MEDICAL is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest 0.62 in PEPTONIC MEDICAL on November 6, 2024 and sell it today you would lose (0.60) from holding PEPTONIC MEDICAL or give up 96.77% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Ares Management Corp vs. PEPTONIC MEDICAL
Performance |
| Timeline |
| Ares Management Corp |
| PEPTONIC MEDICAL |
Ares Management and PEPTONIC MEDICAL Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ares Management and PEPTONIC MEDICAL
The main advantage of trading using opposite Ares Management and PEPTONIC MEDICAL positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ares Management position performs unexpectedly, PEPTONIC MEDICAL 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 PEPTONIC MEDICAL will offset losses from the drop in PEPTONIC MEDICAL's long position.| Ares Management vs. Meiko Electronics Co | Ares Management vs. Samsung Electronics Co | Ares Management vs. Neinor Homes SA | Ares Management vs. Autohome ADR |
| PEPTONIC MEDICAL vs. SK TELECOM TDADR | PEPTONIC MEDICAL vs. Neinor Homes SA | PEPTONIC MEDICAL vs. CENTURIA OFFICE REIT | PEPTONIC MEDICAL vs. Spirent Communications plc |
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 Commodity Channel module to use Commodity Channel Index to analyze current equity momentum.
Other Complementary Tools
| Share Portfolio Track or share privately all of your investments from the convenience of any device | |
| Portfolio Backtesting Avoid under-diversification and over-optimization by backtesting your portfolios | |
| Piotroski F Score Get Piotroski F Score based on the binary analysis strategy of nine different fundamentals | |
| Global Correlations Find global opportunities by holding instruments from different markets | |
| Fundamental Analysis View fundamental data based on most recent published financial statements |