Correlation Between Ares Management and AEON STORES
Can any of the company-specific risk be diversified away by investing in both Ares Management and AEON STORES 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 AEON STORES 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 AEON STORES, you can compare the effects of market volatilities on Ares Management and AEON STORES 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 AEON STORES. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ares Management and AEON STORES.
Diversification Opportunities for Ares Management and AEON STORES
-0.53 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Ares and AEON is -0.53. Overlapping area represents the amount of risk that can be diversified away by holding Ares Management Corp and AEON STORES in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AEON STORES 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 AEON STORES. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of AEON STORES has no effect on the direction of Ares Management i.e., Ares Management and AEON STORES go up and down completely randomly.
Pair Corralation between Ares Management and AEON STORES
Assuming the 90 days horizon Ares Management Corp is expected to generate 2.63 times more return on investment than AEON STORES. However, Ares Management is 2.63 times more volatile than AEON STORES. It trades about 0.13 of its potential returns per unit of risk. AEON STORES is currently generating about -0.1 per unit of risk. If you would invest 9,500 in Ares Management Corp on September 14, 2024 and sell it today you would earn a total of 7,898 from holding Ares Management Corp or generate 83.14% 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. AEON STORES
Performance |
| Timeline |
| Ares Management Corp |
| AEON STORES |
Ares Management and AEON STORES Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ares Management and AEON STORES
The main advantage of trading using opposite Ares Management and AEON STORES positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ares Management position performs unexpectedly, AEON STORES 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 AEON STORES will offset losses from the drop in AEON STORES's long position.| Ares Management vs. Ameriprise Financial | Ares Management vs. Superior Plus Corp | Ares Management vs. SIVERS SEMICONDUCTORS AB | Ares Management vs. CHINA HUARONG ENERHD 50 |
| AEON STORES vs. GREENX METALS LTD | AEON STORES vs. SCANDMEDICAL SOLDK 040 | AEON STORES vs. CompuGroup Medical SE | AEON STORES vs. Virtus Investment Partners |
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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..
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