Correlation Between Ares Management and CM Hospitalar
Can any of the company-specific risk be diversified away by investing in both Ares Management and CM Hospitalar 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 CM Hospitalar into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Ares Management and CM Hospitalar SA, you can compare the effects of market volatilities on Ares Management and CM Hospitalar 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 CM Hospitalar. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ares Management and CM Hospitalar.
Diversification Opportunities for Ares Management and CM Hospitalar
-0.59 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Ares and VVEO3 is -0.59. Overlapping area represents the amount of risk that can be diversified away by holding Ares Management and CM Hospitalar SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CM Hospitalar SA 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 CM Hospitalar. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CM Hospitalar SA has no effect on the direction of Ares Management i.e., Ares Management and CM Hospitalar go up and down completely randomly.
Pair Corralation between Ares Management and CM Hospitalar
Assuming the 90 days trading horizon Ares Management is expected to generate 0.47 times more return on investment than CM Hospitalar. However, Ares Management is 2.13 times less risky than CM Hospitalar. It trades about 0.12 of its potential returns per unit of risk. CM Hospitalar SA is currently generating about -0.1 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 7,318 from holding Ares Management or generate 174.32% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 98.79% |
| Values | Daily Returns |
Ares Management vs. CM Hospitalar SA
Performance |
| Timeline |
| Ares Management |
| CM Hospitalar SA |
Ares Management and CM Hospitalar Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ares Management and CM Hospitalar
The main advantage of trading using opposite Ares Management and CM Hospitalar positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ares Management position performs unexpectedly, CM Hospitalar 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 CM Hospitalar will offset losses from the drop in CM Hospitalar's long position.| Ares Management vs. Extra Space Storage | Ares Management vs. Chunghwa Telecom Co, | Ares Management vs. Capital One Financial | Ares Management vs. Zoom Video Communications |
| CM Hospitalar vs. Clover Health Investments, | CM Hospitalar vs. Take Two Interactive Software | CM Hospitalar vs. G2D Investments | CM Hospitalar vs. Applied Materials, |
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 Money Flow Index module to determine momentum by analyzing Money Flow Index and other technical indicators.
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