Correlation Between Ares Management and United Internet
Can any of the company-specific risk be diversified away by investing in both Ares Management and United Internet 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 United Internet 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 United Internet AG, you can compare the effects of market volatilities on Ares Management and United Internet 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 United Internet. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ares Management and United Internet.
Diversification Opportunities for Ares Management and United Internet
-0.79 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Ares and United is -0.79. Overlapping area represents the amount of risk that can be diversified away by holding Ares Management Corp and United Internet AG in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on United Internet 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 United Internet. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of United Internet AG has no effect on the direction of Ares Management i.e., Ares Management and United Internet go up and down completely randomly.
Pair Corralation between Ares Management and United Internet
Assuming the 90 days horizon Ares Management Corp is expected to generate 2.03 times more return on investment than United Internet. However, Ares Management is 2.03 times more volatile than United Internet AG. It trades about 0.08 of its potential returns per unit of risk. United Internet AG is currently generating about -0.28 per unit of risk. If you would invest 17,169 in Ares Management Corp on October 16, 2024 and sell it today you would earn a total of 403.00 from holding Ares Management Corp or generate 2.35% 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. United Internet AG
Performance |
| Timeline |
| Ares Management Corp |
| United Internet AG |
Ares Management and United Internet Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ares Management and United Internet
The main advantage of trading using opposite Ares Management and United Internet positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ares Management position performs unexpectedly, United Internet 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 United Internet will offset losses from the drop in United Internet's long position.| Ares Management vs. Park Hotels Resorts | Ares Management vs. MHP Hotel AG | Ares Management vs. Pebblebrook Hotel Trust | Ares Management vs. SOEDER SPORTFISKE AB |
| United Internet vs. Nordic Semiconductor ASA | United Internet vs. YATRA ONLINE DL 0001 | United Internet vs. BOS BETTER ONLINE | United Internet vs. Salesforce |
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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.
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