Correlation Between Ares Management and Elysee Development
Can any of the company-specific risk be diversified away by investing in both Ares Management and Elysee Development 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 Elysee Development 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 Elysee Development Corp, you can compare the effects of market volatilities on Ares Management and Elysee Development 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 Elysee Development. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ares Management and Elysee Development.
Diversification Opportunities for Ares Management and Elysee Development
0.04 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Ares and Elysee is 0.04. Overlapping area represents the amount of risk that can be diversified away by holding Ares Management Corp and Elysee Development Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Elysee Development Corp 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 Elysee Development. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Elysee Development Corp has no effect on the direction of Ares Management i.e., Ares Management and Elysee Development go up and down completely randomly.
Pair Corralation between Ares Management and Elysee Development
Assuming the 90 days horizon Ares Management Corp is expected to generate 0.39 times more return on investment than Elysee Development. However, Ares Management Corp is 2.55 times less risky than Elysee Development. It trades about 0.12 of its potential returns per unit of risk. Elysee Development Corp is currently generating about 0.04 per unit of risk. If you would invest 15,384 in Ares Management Corp on September 2, 2024 and sell it today you would earn a total of 1,068 from holding Ares Management Corp or generate 6.94% 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. Elysee Development Corp
Performance |
| Timeline |
| Ares Management Corp |
| Elysee Development Corp |
Ares Management and Elysee Development Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ares Management and Elysee Development
The main advantage of trading using opposite Ares Management and Elysee Development positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ares Management position performs unexpectedly, Elysee Development 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 Elysee Development will offset losses from the drop in Elysee Development's long position.| Ares Management vs. Ameriprise Financial | Ares Management vs. Superior Plus Corp | Ares Management vs. NMI Holdings | Ares Management vs. Origin Agritech |
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 Insider Screener module to find insiders across different sectors to evaluate their impact on performance.
Other Complementary Tools
| Volatility Analysis Get historical volatility and risk analysis based on latest market data | |
| Analyst Advice Analyst recommendations and target price estimates broken down by several categories | |
| CEOs Directory Screen CEOs from public companies around the world | |
| Odds Of Bankruptcy Get analysis of equity chance of financial distress in the next 2 years | |
| Piotroski F Score Get Piotroski F Score based on the binary analysis strategy of nine different fundamentals |