Correlation Between Ares Management and NORDIC HALIBUT
Can any of the company-specific risk be diversified away by investing in both Ares Management and NORDIC HALIBUT 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 NORDIC HALIBUT 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 NORDIC HALIBUT AS, you can compare the effects of market volatilities on Ares Management and NORDIC HALIBUT 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 NORDIC HALIBUT. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ares Management and NORDIC HALIBUT.
Diversification Opportunities for Ares Management and NORDIC HALIBUT
-0.8 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Ares and NORDIC is -0.8. Overlapping area represents the amount of risk that can be diversified away by holding Ares Management Corp and NORDIC HALIBUT AS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on NORDIC HALIBUT AS 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 NORDIC HALIBUT. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of NORDIC HALIBUT AS has no effect on the direction of Ares Management i.e., Ares Management and NORDIC HALIBUT go up and down completely randomly.
Pair Corralation between Ares Management and NORDIC HALIBUT
Assuming the 90 days horizon Ares Management Corp is expected to generate 0.84 times more return on investment than NORDIC HALIBUT. However, Ares Management Corp is 1.18 times less risky than NORDIC HALIBUT. It trades about 0.19 of its potential returns per unit of risk. NORDIC HALIBUT AS is currently generating about -0.07 per unit of risk. If you would invest 17,092 in Ares Management Corp on November 3, 2024 and sell it today you would earn a total of 1,480 from holding Ares Management Corp or generate 8.66% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Ares Management Corp vs. NORDIC HALIBUT AS
Performance |
| Timeline |
| Ares Management Corp |
| NORDIC HALIBUT AS |
Ares Management and NORDIC HALIBUT Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ares Management and NORDIC HALIBUT
The main advantage of trading using opposite Ares Management and NORDIC HALIBUT positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ares Management position performs unexpectedly, NORDIC HALIBUT 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 NORDIC HALIBUT will offset losses from the drop in NORDIC HALIBUT's long position.| Ares Management vs. NTG Nordic Transport | Ares Management vs. Transport International Holdings | Ares Management vs. COLUMBIA SPORTSWEAR | Ares Management vs. SOLSTAD OFFSHORE NK |
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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 Global Markets Map module to get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes.
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