Correlation Between Ares Management and Jefferies Financial
Can any of the company-specific risk be diversified away by investing in both Ares Management and Jefferies Financial 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 Jefferies Financial into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Ares Management and Jefferies Financial Group, you can compare the effects of market volatilities on Ares Management and Jefferies Financial 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 Jefferies Financial. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ares Management and Jefferies Financial.
Diversification Opportunities for Ares Management and Jefferies Financial
0.84 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Ares and Jefferies is 0.84. Overlapping area represents the amount of risk that can be diversified away by holding Ares Management and Jefferies Financial Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Jefferies Financial 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 Jefferies Financial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Jefferies Financial has no effect on the direction of Ares Management i.e., Ares Management and Jefferies Financial go up and down completely randomly.
Pair Corralation between Ares Management and Jefferies Financial
Assuming the 90 days trading horizon Ares Management is expected to generate 0.7 times more return on investment than Jefferies Financial. However, Ares Management is 1.43 times less risky than Jefferies Financial. It trades about 0.12 of its potential returns per unit of risk. Jefferies Financial Group is currently generating about 0.08 per unit of risk. If you would invest 4,198 in Ares Management on October 25, 2024 and sell it today you would earn a total of 7,353 from holding Ares Management or generate 175.15% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Ares Management vs. Jefferies Financial Group
Performance |
| Timeline |
| Ares Management |
| Jefferies Financial |
Ares Management and Jefferies Financial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ares Management and Jefferies Financial
The main advantage of trading using opposite Ares Management and Jefferies Financial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ares Management position performs unexpectedly, Jefferies Financial 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 Jefferies Financial will offset losses from the drop in Jefferies Financial's long position.| Ares Management vs. Martin Marietta Materials, | Ares Management vs. CM Hospitalar SA | Ares Management vs. Bemobi Mobile Tech | Ares Management vs. Charter Communications |
| Jefferies Financial vs. Financeira Alfa SA | Jefferies Financial vs. Datadog, | Jefferies Financial vs. Energisa SA | Jefferies Financial vs. BTG Pactual Logstica |
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 Analyst Advice module to analyst recommendations and target price estimates broken down by several categories.
Other Complementary Tools
| Fundamentals Comparison Compare fundamentals across multiple equities to find investing opportunities | |
| Portfolio Dashboard Portfolio dashboard that provides centralized access to all your investments | |
| Portfolio Volatility Check portfolio volatility and analyze historical return density to properly model market risk | |
| Stock Screener Find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook. | |
| ETF Categories List of ETF categories grouped based on various criteria, such as the investment strategy or type of investments |