Correlation Between Ares Management and QUEEN S
Can any of the company-specific risk be diversified away by investing in both Ares Management and QUEEN S 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 QUEEN S 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 QUEEN S ROAD, you can compare the effects of market volatilities on Ares Management and QUEEN S 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 QUEEN S. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ares Management and QUEEN S.
Diversification Opportunities for Ares Management and QUEEN S
-0.53 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Ares and QUEEN is -0.53. Overlapping area represents the amount of risk that can be diversified away by holding Ares Management Corp and QUEEN S ROAD in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on QUEEN S ROAD 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 QUEEN S. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of QUEEN S ROAD has no effect on the direction of Ares Management i.e., Ares Management and QUEEN S go up and down completely randomly.
Pair Corralation between Ares Management and QUEEN S
Assuming the 90 days horizon Ares Management Corp is expected to under-perform the QUEEN S. But the stock apears to be less risky and, when comparing its historical volatility, Ares Management Corp is 1.2 times less risky than QUEEN S. The stock trades about -0.32 of its potential returns per unit of risk. The QUEEN S ROAD is currently generating about 0.11 of returns per unit of risk over similar time horizon. If you would invest 437.00 in QUEEN S ROAD on November 27, 2024 and sell it today you would earn a total of 23.00 from holding QUEEN S ROAD or generate 5.26% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Ares Management Corp vs. QUEEN S ROAD
Performance |
| Timeline |
| Ares Management Corp |
| QUEEN S ROAD |
Ares Management and QUEEN S Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ares Management and QUEEN S
The main advantage of trading using opposite Ares Management and QUEEN S positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ares Management position performs unexpectedly, QUEEN S 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 QUEEN S will offset losses from the drop in QUEEN S's long position.| Ares Management vs. United Overseas Insurance | Ares Management vs. Ping An Insurance | Ares Management vs. ITALIAN WINE BRANDS | Ares Management vs. Singapore Reinsurance |
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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 Portfolio Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.
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