Correlation Between Ares Management and EIDESVIK OFFSHORE
Can any of the company-specific risk be diversified away by investing in both Ares Management and EIDESVIK OFFSHORE 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 EIDESVIK OFFSHORE 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 EIDESVIK OFFSHORE NK, you can compare the effects of market volatilities on Ares Management and EIDESVIK OFFSHORE 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 EIDESVIK OFFSHORE. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ares Management and EIDESVIK OFFSHORE.
Diversification Opportunities for Ares Management and EIDESVIK OFFSHORE
0.05 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Ares and EIDESVIK is 0.05. Overlapping area represents the amount of risk that can be diversified away by holding Ares Management Corp and EIDESVIK OFFSHORE NK in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on EIDESVIK OFFSHORE 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 EIDESVIK OFFSHORE. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of EIDESVIK OFFSHORE has no effect on the direction of Ares Management i.e., Ares Management and EIDESVIK OFFSHORE go up and down completely randomly.
Pair Corralation between Ares Management and EIDESVIK OFFSHORE
Assuming the 90 days horizon Ares Management Corp is expected to generate 1.07 times more return on investment than EIDESVIK OFFSHORE. However, Ares Management is 1.07 times more volatile than EIDESVIK OFFSHORE NK. It trades about 0.2 of its potential returns per unit of risk. EIDESVIK OFFSHORE NK is currently generating about 0.06 per unit of risk. If you would invest 17,092 in Ares Management Corp on November 2, 2024 and sell it today you would earn a total of 1,396 from holding Ares Management Corp or generate 8.17% 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. EIDESVIK OFFSHORE NK
Performance |
| Timeline |
| Ares Management Corp |
| EIDESVIK OFFSHORE |
Ares Management and EIDESVIK OFFSHORE Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ares Management and EIDESVIK OFFSHORE
The main advantage of trading using opposite Ares Management and EIDESVIK OFFSHORE positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ares Management position performs unexpectedly, EIDESVIK OFFSHORE 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 EIDESVIK OFFSHORE will offset losses from the drop in EIDESVIK OFFSHORE's long position.| Ares Management vs. MCEWEN MINING INC | Ares Management vs. Aya Gold Silver | Ares Management vs. MAG SILVER | Ares Management vs. Yanzhou Coal Mining |
| EIDESVIK OFFSHORE vs. Wayside Technology Group | EIDESVIK OFFSHORE vs. DXC Technology Co | EIDESVIK OFFSHORE vs. Easy Software AG | EIDESVIK OFFSHORE vs. Ribbon Communications |
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 Fundamentals Comparison module to compare fundamentals across multiple equities to find investing opportunities.
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