Correlation Between Ares Management and CLEAR CHANNEL
Can any of the company-specific risk be diversified away by investing in both Ares Management and CLEAR CHANNEL 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 CLEAR CHANNEL 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 CLEAR CHANNEL OHA, you can compare the effects of market volatilities on Ares Management and CLEAR CHANNEL 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 CLEAR CHANNEL. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ares Management and CLEAR CHANNEL.
Diversification Opportunities for Ares Management and CLEAR CHANNEL
0.08 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Ares and CLEAR is 0.08. Overlapping area represents the amount of risk that can be diversified away by holding Ares Management Corp and CLEAR CHANNEL OHA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CLEAR CHANNEL OHA 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 CLEAR CHANNEL. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CLEAR CHANNEL OHA has no effect on the direction of Ares Management i.e., Ares Management and CLEAR CHANNEL go up and down completely randomly.
Pair Corralation between Ares Management and CLEAR CHANNEL
Assuming the 90 days horizon Ares Management Corp is expected to generate 0.47 times more return on investment than CLEAR CHANNEL. However, Ares Management Corp is 2.12 times less risky than CLEAR CHANNEL. It trades about 0.11 of its potential returns per unit of risk. CLEAR CHANNEL OHA is currently generating about 0.02 per unit of risk. If you would invest 6,757 in Ares Management Corp on October 13, 2024 and sell it today you would earn a total of 10,799 from holding Ares Management Corp or generate 159.82% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Ares Management Corp vs. CLEAR CHANNEL OHA
Performance |
| Timeline |
| Ares Management Corp |
| CLEAR CHANNEL OHA |
Ares Management and CLEAR CHANNEL Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ares Management and CLEAR CHANNEL
The main advantage of trading using opposite Ares Management and CLEAR CHANNEL positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ares Management position performs unexpectedly, CLEAR CHANNEL 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 CLEAR CHANNEL will offset losses from the drop in CLEAR CHANNEL's long position.| Ares Management vs. Penn National Gaming | Ares Management vs. Calibre Mining Corp | Ares Management vs. Sixt Leasing SE | Ares Management vs. FUYO GENERAL LEASE |
| CLEAR CHANNEL vs. Altair Engineering | CLEAR CHANNEL vs. BRAGG GAMING GRP | CLEAR CHANNEL vs. Delta Air Lines | CLEAR CHANNEL vs. Media and Games |
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 Technical Analysis module to check basic technical indicators and analysis based on most latest market data.
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