Correlation Between Ares Management and Pedra Dourada
Can any of the company-specific risk be diversified away by investing in both Ares Management and Pedra Dourada 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 Pedra Dourada into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Ares Management and Pedra Dourada Fundo, you can compare the effects of market volatilities on Ares Management and Pedra Dourada 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 Pedra Dourada. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ares Management and Pedra Dourada.
Diversification Opportunities for Ares Management and Pedra Dourada
0.57 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Ares and Pedra is 0.57. Overlapping area represents the amount of risk that can be diversified away by holding Ares Management and Pedra Dourada Fundo in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Pedra Dourada Fundo 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 Pedra Dourada. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Pedra Dourada Fundo has no effect on the direction of Ares Management i.e., Ares Management and Pedra Dourada go up and down completely randomly.
Pair Corralation between Ares Management and Pedra Dourada
Assuming the 90 days trading horizon Ares Management is expected to under-perform the Pedra Dourada. In addition to that, Ares Management is 1.67 times more volatile than Pedra Dourada Fundo. It trades about -0.04 of its total potential returns per unit of risk. Pedra Dourada Fundo is currently generating about 0.44 per unit of volatility. If you would invest 3,189 in Pedra Dourada Fundo on November 9, 2024 and sell it today you would earn a total of 311.00 from holding Pedra Dourada Fundo or generate 9.75% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Ares Management vs. Pedra Dourada Fundo
Performance |
| Timeline |
| Ares Management |
| Pedra Dourada Fundo |
Ares Management and Pedra Dourada Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ares Management and Pedra Dourada
The main advantage of trading using opposite Ares Management and Pedra Dourada positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ares Management position performs unexpectedly, Pedra Dourada 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 Pedra Dourada will offset losses from the drop in Pedra Dourada's long position.| Ares Management vs. Unity Software | Ares Management vs. Take Two Interactive Software | Ares Management vs. United States Steel | Ares Management vs. Clover Health Investments, |
| Pedra Dourada vs. Performa Real Estate | Pedra Dourada vs. JS Real Estate | Pedra Dourada vs. WHG REAL ESTATE | Pedra Dourada vs. ZAVIT REAL ESTATE |
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 Suggestion module to get suggestions outside of your existing asset allocation including your own model portfolios.
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