Correlation Between Ares Management and China BlueChemical
Can any of the company-specific risk be diversified away by investing in both Ares Management and China BlueChemical 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 China BlueChemical 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 China BlueChemical, you can compare the effects of market volatilities on Ares Management and China BlueChemical 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 China BlueChemical. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ares Management and China BlueChemical.
Diversification Opportunities for Ares Management and China BlueChemical
0.31 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Ares and China is 0.31. Overlapping area represents the amount of risk that can be diversified away by holding Ares Management Corp and China BlueChemical in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on China BlueChemical 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 China BlueChemical. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of China BlueChemical has no effect on the direction of Ares Management i.e., Ares Management and China BlueChemical go up and down completely randomly.
Pair Corralation between Ares Management and China BlueChemical
Assuming the 90 days horizon Ares Management Corp is expected to generate 0.55 times more return on investment than China BlueChemical. However, Ares Management Corp is 1.8 times less risky than China BlueChemical. It trades about 0.12 of its potential returns per unit of risk. China BlueChemical is currently generating about 0.03 per unit of risk. If you would invest 12,207 in Ares Management Corp on October 13, 2024 and sell it today you would earn a total of 4,993 from holding Ares Management Corp or generate 40.9% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Ares Management Corp vs. China BlueChemical
Performance |
| Timeline |
| Ares Management Corp |
| China BlueChemical |
Ares Management and China BlueChemical Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ares Management and China BlueChemical
The main advantage of trading using opposite Ares Management and China BlueChemical positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ares Management position performs unexpectedly, China BlueChemical 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 China BlueChemical will offset losses from the drop in China BlueChemical'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 |
| China BlueChemical vs. GALENA MINING LTD | China BlueChemical vs. Brockhaus Capital Management | China BlueChemical vs. Ares Management Corp | China BlueChemical vs. Q2M Managementberatung AG |
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 Portfolio Center module to all portfolio management and optimization tools to improve performance of your portfolios.
Other Complementary Tools
| CEOs Directory Screen CEOs from public companies around the world | |
| Global Markets Map Get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes | |
| Portfolio Holdings Check your current holdings and cash postion to detemine if your portfolio needs rebalancing | |
| Piotroski F Score Get Piotroski F Score based on the binary analysis strategy of nine different fundamentals | |
| Fundamental Analysis View fundamental data based on most recent published financial statements |