Correlation Between Ares Management and AIR LIQUIDE
Can any of the company-specific risk be diversified away by investing in both Ares Management and AIR LIQUIDE 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 AIR LIQUIDE 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 AIR LIQUIDE ADR, you can compare the effects of market volatilities on Ares Management and AIR LIQUIDE 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 AIR LIQUIDE. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ares Management and AIR LIQUIDE.
Diversification Opportunities for Ares Management and AIR LIQUIDE
-0.24 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Ares and AIR is -0.24. Overlapping area represents the amount of risk that can be diversified away by holding Ares Management Corp and AIR LIQUIDE ADR in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AIR LIQUIDE ADR 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 AIR LIQUIDE. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of AIR LIQUIDE ADR has no effect on the direction of Ares Management i.e., Ares Management and AIR LIQUIDE go up and down completely randomly.
Pair Corralation between Ares Management and AIR LIQUIDE
Assuming the 90 days horizon Ares Management Corp is expected to under-perform the AIR LIQUIDE. In addition to that, Ares Management is 1.34 times more volatile than AIR LIQUIDE ADR. It trades about -0.22 of its total potential returns per unit of risk. AIR LIQUIDE ADR is currently generating about 0.18 per unit of volatility. If you would invest 3,120 in AIR LIQUIDE ADR on December 11, 2024 and sell it today you would earn a total of 400.00 from holding AIR LIQUIDE ADR or generate 12.82% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Ares Management Corp vs. AIR LIQUIDE ADR
Performance |
| Timeline |
| Ares Management Corp |
| AIR LIQUIDE ADR |
Ares Management and AIR LIQUIDE Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ares Management and AIR LIQUIDE
The main advantage of trading using opposite Ares Management and AIR LIQUIDE positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ares Management position performs unexpectedly, AIR LIQUIDE 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 AIR LIQUIDE will offset losses from the drop in AIR LIQUIDE's long position.| Ares Management vs. SENECA FOODS A | Ares Management vs. Moneysupermarket Group PLC | Ares Management vs. MAVEN WIRELESS SWEDEN | Ares Management vs. Office Properties Income |
| AIR LIQUIDE vs. MAVEN WIRELESS SWEDEN | AIR LIQUIDE vs. ALBIS LEASING AG | AIR LIQUIDE vs. OFFICE DEPOT | AIR LIQUIDE vs. UNITED RENTALS |
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 Aroon Oscillator module to analyze current equity momentum using Aroon Oscillator and other momentum ratios.
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