Correlation Between Ares Management and VIVA WINE
Can any of the company-specific risk be diversified away by investing in both Ares Management and VIVA WINE 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 VIVA WINE 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 VIVA WINE GROUP, you can compare the effects of market volatilities on Ares Management and VIVA WINE 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 VIVA WINE. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ares Management and VIVA WINE.
Diversification Opportunities for Ares Management and VIVA WINE
-0.62 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Ares and VIVA is -0.62. Overlapping area represents the amount of risk that can be diversified away by holding Ares Management Corp and VIVA WINE GROUP in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on VIVA WINE GROUP 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 VIVA WINE. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of VIVA WINE GROUP has no effect on the direction of Ares Management i.e., Ares Management and VIVA WINE go up and down completely randomly.
Pair Corralation between Ares Management and VIVA WINE
Assuming the 90 days horizon Ares Management Corp is expected to generate 1.23 times more return on investment than VIVA WINE. However, Ares Management is 1.23 times more volatile than VIVA WINE GROUP. It trades about 0.16 of its potential returns per unit of risk. VIVA WINE GROUP is currently generating about -0.05 per unit of risk. If you would invest 16,005 in Ares Management Corp on November 6, 2024 and sell it today you would earn a total of 3,051 from holding Ares Management Corp or generate 19.06% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Ares Management Corp vs. VIVA WINE GROUP
Performance |
| Timeline |
| Ares Management Corp |
| VIVA WINE GROUP |
Ares Management and VIVA WINE Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ares Management and VIVA WINE
The main advantage of trading using opposite Ares Management and VIVA WINE positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ares Management position performs unexpectedly, VIVA WINE 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 VIVA WINE will offset losses from the drop in VIVA WINE's long position.| Ares Management vs. Meiko Electronics Co | Ares Management vs. Samsung Electronics Co | Ares Management vs. Neinor Homes SA | Ares Management vs. Autohome ADR |
| VIVA WINE vs. INFORMATION SVC GRP | VIVA WINE vs. OPKO HEALTH | VIVA WINE vs. CARDINAL HEALTH | VIVA WINE vs. Cardinal Health |
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 Crypto Correlations module to use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins.
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