Correlation Between Ares Management and PUBLIC STORAGE
Can any of the company-specific risk be diversified away by investing in both Ares Management and PUBLIC STORAGE 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 PUBLIC STORAGE 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 PUBLIC STORAGE PRFO, you can compare the effects of market volatilities on Ares Management and PUBLIC STORAGE 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 PUBLIC STORAGE. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ares Management and PUBLIC STORAGE.
Diversification Opportunities for Ares Management and PUBLIC STORAGE
0.06 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Ares and PUBLIC is 0.06. Overlapping area represents the amount of risk that can be diversified away by holding Ares Management Corp and PUBLIC STORAGE PRFO in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on PUBLIC STORAGE PRFO 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 PUBLIC STORAGE. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of PUBLIC STORAGE PRFO has no effect on the direction of Ares Management i.e., Ares Management and PUBLIC STORAGE go up and down completely randomly.
Pair Corralation between Ares Management and PUBLIC STORAGE
Assuming the 90 days horizon Ares Management Corp is expected to generate 1.79 times more return on investment than PUBLIC STORAGE. However, Ares Management is 1.79 times more volatile than PUBLIC STORAGE PRFO. It trades about 0.12 of its potential returns per unit of risk. PUBLIC STORAGE PRFO is currently generating about 0.03 per unit of risk. If you would invest 6,096 in Ares Management Corp on September 12, 2024 and sell it today you would earn a total of 10,826 from holding Ares Management Corp or generate 177.59% 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. PUBLIC STORAGE PRFO
Performance |
| Timeline |
| Ares Management Corp |
| PUBLIC STORAGE PRFO |
Ares Management and PUBLIC STORAGE Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ares Management and PUBLIC STORAGE
The main advantage of trading using opposite Ares Management and PUBLIC STORAGE positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ares Management position performs unexpectedly, PUBLIC STORAGE 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 PUBLIC STORAGE will offset losses from the drop in PUBLIC STORAGE'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 |
| PUBLIC STORAGE vs. Xtrackers LevDAX | PUBLIC STORAGE vs. Xtrackers ShortDAX | PUBLIC STORAGE vs. Lyxor 1 | PUBLIC STORAGE vs. SIVERS SEMICONDUCTORS AB |
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 Equity Search module to search for actively traded equities including funds and ETFs from over 30 global markets.
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