Correlation Between Ares Management and Swiss Re
Can any of the company-specific risk be diversified away by investing in both Ares Management and Swiss Re 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 Swiss Re 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 Swiss Re AG, you can compare the effects of market volatilities on Ares Management and Swiss Re 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 Swiss Re. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ares Management and Swiss Re.
Diversification Opportunities for Ares Management and Swiss Re
0.86 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Ares and Swiss is 0.86. Overlapping area represents the amount of risk that can be diversified away by holding Ares Management Corp and Swiss Re AG in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Swiss Re AG 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 Swiss Re. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Swiss Re AG has no effect on the direction of Ares Management i.e., Ares Management and Swiss Re go up and down completely randomly.
Pair Corralation between Ares Management and Swiss Re
Assuming the 90 days horizon Ares Management Corp is expected to generate 1.06 times more return on investment than Swiss Re. However, Ares Management is 1.06 times more volatile than Swiss Re AG. It trades about 0.2 of its potential returns per unit of risk. Swiss Re AG is currently generating about 0.09 per unit of risk. If you would invest 17,502 in Ares Management Corp on November 7, 2024 and sell it today you would earn a total of 1,456 from holding Ares Management Corp or generate 8.32% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Ares Management Corp vs. Swiss Re AG
Performance |
| Timeline |
| Ares Management Corp |
| Swiss Re AG |
Ares Management and Swiss Re Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ares Management and Swiss Re
The main advantage of trading using opposite Ares Management and Swiss Re positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ares Management position performs unexpectedly, Swiss Re 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 Swiss Re will offset losses from the drop in Swiss Re'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 |
| Swiss Re vs. CARSALESCOM | Swiss Re vs. CompuGroup Medical SE | Swiss Re vs. CANON MARKETING JP | Swiss Re vs. PULSION Medical Systems |
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 Sign In To Macroaxis module to sign in to explore Macroaxis' wealth optimization platform and fintech modules.
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