Correlation Between Ares Management and Xiwang Special
Can any of the company-specific risk be diversified away by investing in both Ares Management and Xiwang Special 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 Xiwang Special 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 Xiwang Special Steel, you can compare the effects of market volatilities on Ares Management and Xiwang Special 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 Xiwang Special. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ares Management and Xiwang Special.
Diversification Opportunities for Ares Management and Xiwang Special
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Ares and Xiwang is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Ares Management Corp and Xiwang Special Steel in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Xiwang Special Steel 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 Xiwang Special. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Xiwang Special Steel has no effect on the direction of Ares Management i.e., Ares Management and Xiwang Special go up and down completely randomly.
Pair Corralation between Ares Management and Xiwang Special
Assuming the 90 days horizon Ares Management is expected to generate 41.8 times less return on investment than Xiwang Special. But when comparing it to its historical volatility, Ares Management Corp is 54.8 times less risky than Xiwang Special. It trades about 0.11 of its potential returns per unit of risk. Xiwang Special Steel is currently generating about 0.09 of returns per unit of risk over similar time horizon. If you would invest 0.97 in Xiwang Special Steel on October 13, 2024 and sell it today you would lose (0.96) from holding Xiwang Special Steel or give up 98.97% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 99.8% |
| Values | Daily Returns |
Ares Management Corp vs. Xiwang Special Steel
Performance |
| Timeline |
| Ares Management Corp |
| Xiwang Special Steel |
Ares Management and Xiwang Special Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ares Management and Xiwang Special
The main advantage of trading using opposite Ares Management and Xiwang Special positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ares Management position performs unexpectedly, Xiwang Special 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 Xiwang Special will offset losses from the drop in Xiwang Special'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 |
| Xiwang Special vs. NAGOYA RAILROAD | Xiwang Special vs. Ares Management Corp | Xiwang Special vs. Air Transport Services | Xiwang Special vs. EVS Broadcast Equipment |
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.
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