Correlation Between Ares Management and ASURE SOFTWARE
Can any of the company-specific risk be diversified away by investing in both Ares Management and ASURE SOFTWARE 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 ASURE SOFTWARE 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 ASURE SOFTWARE, you can compare the effects of market volatilities on Ares Management and ASURE SOFTWARE 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 ASURE SOFTWARE. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ares Management and ASURE SOFTWARE.
Diversification Opportunities for Ares Management and ASURE SOFTWARE
0.79 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Ares and ASURE is 0.79. Overlapping area represents the amount of risk that can be diversified away by holding Ares Management Corp and ASURE SOFTWARE in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ASURE SOFTWARE 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 ASURE SOFTWARE. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ASURE SOFTWARE has no effect on the direction of Ares Management i.e., Ares Management and ASURE SOFTWARE go up and down completely randomly.
Pair Corralation between Ares Management and ASURE SOFTWARE
Assuming the 90 days horizon Ares Management is expected to generate 1.24 times less return on investment than ASURE SOFTWARE. But when comparing it to its historical volatility, Ares Management Corp is 1.32 times less risky than ASURE SOFTWARE. It trades about 0.22 of its potential returns per unit of risk. ASURE SOFTWARE is currently generating about 0.21 of returns per unit of risk over similar time horizon. If you would invest 770.00 in ASURE SOFTWARE on September 5, 2024 and sell it today you would earn a total of 135.00 from holding ASURE SOFTWARE or generate 17.53% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Ares Management Corp vs. ASURE SOFTWARE
Performance |
| Timeline |
| Ares Management Corp |
| ASURE SOFTWARE |
Ares Management and ASURE SOFTWARE Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ares Management and ASURE SOFTWARE
The main advantage of trading using opposite Ares Management and ASURE SOFTWARE positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ares Management position performs unexpectedly, ASURE SOFTWARE 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 ASURE SOFTWARE will offset losses from the drop in ASURE SOFTWARE's long position.| Ares Management vs. Blackstone Group | Ares Management vs. BlackRock | Ares Management vs. The Bank of | Ares Management vs. Ameriprise Financial |
| ASURE SOFTWARE vs. Eastman Chemical | ASURE SOFTWARE vs. Ares Management Corp | ASURE SOFTWARE vs. China BlueChemical | ASURE SOFTWARE vs. NISSAN CHEMICAL IND |
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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.
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