Correlation Between Ares Management and COREBRIDGE FINANCIAL
Can any of the company-specific risk be diversified away by investing in both Ares Management and COREBRIDGE FINANCIAL 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 COREBRIDGE FINANCIAL 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 COREBRIDGE FINANCIAL INC, you can compare the effects of market volatilities on Ares Management and COREBRIDGE FINANCIAL 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 COREBRIDGE FINANCIAL. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ares Management and COREBRIDGE FINANCIAL.
Diversification Opportunities for Ares Management and COREBRIDGE FINANCIAL
0.7 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Ares and COREBRIDGE is 0.7. Overlapping area represents the amount of risk that can be diversified away by holding Ares Management Corp and COREBRIDGE FINANCIAL INC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on COREBRIDGE FINANCIAL INC 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 COREBRIDGE FINANCIAL. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of COREBRIDGE FINANCIAL INC has no effect on the direction of Ares Management i.e., Ares Management and COREBRIDGE FINANCIAL go up and down completely randomly.
Pair Corralation between Ares Management and COREBRIDGE FINANCIAL
Assuming the 90 days horizon Ares Management Corp is expected to under-perform the COREBRIDGE FINANCIAL. In addition to that, Ares Management is 1.85 times more volatile than COREBRIDGE FINANCIAL INC. It trades about -0.01 of its total potential returns per unit of risk. COREBRIDGE FINANCIAL INC is currently generating about 0.27 per unit of volatility. If you would invest 2,857 in COREBRIDGE FINANCIAL INC on October 13, 2024 and sell it today you would earn a total of 163.00 from holding COREBRIDGE FINANCIAL INC or generate 5.71% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Ares Management Corp vs. COREBRIDGE FINANCIAL INC
Performance |
| Timeline |
| Ares Management Corp |
| COREBRIDGE FINANCIAL INC |
Ares Management and COREBRIDGE FINANCIAL Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ares Management and COREBRIDGE FINANCIAL
The main advantage of trading using opposite Ares Management and COREBRIDGE FINANCIAL positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ares Management position performs unexpectedly, COREBRIDGE FINANCIAL 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 COREBRIDGE FINANCIAL will offset losses from the drop in COREBRIDGE FINANCIAL's long position.| Ares Management vs. Caseys General Stores | Ares Management vs. BURLINGTON STORES | Ares Management vs. PACIFIC ONLINE | Ares Management vs. Fast Retailing Co |
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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 Correlations module to find global opportunities by holding instruments from different markets.
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