Correlation Between Ares Management and BIONTECH
Can any of the company-specific risk be diversified away by investing in both Ares Management and BIONTECH 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 BIONTECH into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Ares Management and BIONTECH SE DRN, you can compare the effects of market volatilities on Ares Management and BIONTECH 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 BIONTECH. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ares Management and BIONTECH.
Diversification Opportunities for Ares Management and BIONTECH
0.73 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Ares and BIONTECH is 0.73. Overlapping area represents the amount of risk that can be diversified away by holding Ares Management and BIONTECH SE DRN in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BIONTECH SE DRN 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 are associated (or correlated) with BIONTECH. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of BIONTECH SE DRN has no effect on the direction of Ares Management i.e., Ares Management and BIONTECH go up and down completely randomly.
Pair Corralation between Ares Management and BIONTECH
Assuming the 90 days trading horizon Ares Management is expected to generate 0.67 times more return on investment than BIONTECH. However, Ares Management is 1.49 times less risky than BIONTECH. It trades about 0.0 of its potential returns per unit of risk. BIONTECH SE DRN is currently generating about -0.05 per unit of risk. If you would invest 10,951 in Ares Management on October 17, 2024 and sell it today you would lose (31.00) from holding Ares Management or give up 0.28% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 94.74% |
| Values | Daily Returns |
Ares Management vs. BIONTECH SE DRN
Performance |
| Timeline |
| Ares Management |
| BIONTECH SE DRN |
Ares Management and BIONTECH Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ares Management and BIONTECH
The main advantage of trading using opposite Ares Management and BIONTECH positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ares Management position performs unexpectedly, BIONTECH 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 BIONTECH will offset losses from the drop in BIONTECH's long position.| Ares Management vs. BIONTECH SE DRN | Ares Management vs. Nordon Indstrias Metalrgicas | Ares Management vs. JB Hunt Transport | Ares Management vs. Roper Technologies, |
| BIONTECH vs. Monster Beverage | BIONTECH vs. Academy Sports and | BIONTECH vs. Warner Music Group | BIONTECH vs. Ares Management |
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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