Correlation Between ZhongAn Online and Ares Management
Can any of the company-specific risk be diversified away by investing in both ZhongAn Online and Ares Management 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 ZhongAn Online and Ares Management into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between ZhongAn Online P and Ares Management Corp, you can compare the effects of market volatilities on ZhongAn Online and Ares Management 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 ZhongAn Online with a short position of Ares Management. Check out your portfolio center. Please also check ongoing floating volatility patterns of ZhongAn Online and Ares Management.
Diversification Opportunities for ZhongAn Online and Ares Management
-0.67 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between ZhongAn and Ares is -0.67. Overlapping area represents the amount of risk that can be diversified away by holding ZhongAn Online P and Ares Management Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ares Management Corp and ZhongAn Online 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 ZhongAn Online P are associated (or correlated) with Ares Management. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ares Management Corp has no effect on the direction of ZhongAn Online i.e., ZhongAn Online and Ares Management go up and down completely randomly.
Pair Corralation between ZhongAn Online and Ares Management
Assuming the 90 days trading horizon ZhongAn Online P is expected to generate 1.53 times more return on investment than Ares Management. However, ZhongAn Online is 1.53 times more volatile than Ares Management Corp. It trades about 0.16 of its potential returns per unit of risk. Ares Management Corp is currently generating about 0.21 per unit of risk. If you would invest 133.00 in ZhongAn Online P on November 9, 2024 and sell it today you would earn a total of 12.00 from holding ZhongAn Online P or generate 9.02% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
ZhongAn Online P vs. Ares Management Corp
Performance |
| Timeline |
| ZhongAn Online P |
| Ares Management Corp |
ZhongAn Online and Ares Management Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with ZhongAn Online and Ares Management
The main advantage of trading using opposite ZhongAn Online and Ares Management positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ZhongAn Online position performs unexpectedly, Ares Management 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 Ares Management will offset losses from the drop in Ares Management's long position.| ZhongAn Online vs. SQUIRREL MEDIA SA | ZhongAn Online vs. Elmos Semiconductor SE | ZhongAn Online vs. CNVISION MEDIA | ZhongAn Online vs. PROSIEBENSAT1 MEDIADR4 |
| Ares Management vs. Darden Restaurants | Ares Management vs. Erste Group Bank | Ares Management vs. ETFS Coffee ETC | Ares Management vs. NORTHEAST UTILITIES |
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 Portfolio Comparator module to compare the composition, asset allocations and performance of any two portfolios in your account.
Other Complementary Tools
| Instant Ratings Determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance | |
| Idea Breakdown Analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes | |
| Portfolio Manager State of the art Portfolio Manager to monitor and improve performance of your invested capital | |
| Money Flow Index Determine momentum by analyzing Money Flow Index and other technical indicators | |
| Investing Opportunities Build portfolios using our predefined set of ideas and optimize them against your investing preferences |