Correlation Between AdCapital and Ares Management
Can any of the company-specific risk be diversified away by investing in both AdCapital 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 AdCapital and Ares Management into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between AdCapital AG and Ares Management Corp, you can compare the effects of market volatilities on AdCapital 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 AdCapital with a short position of Ares Management. Check out your portfolio center. Please also check ongoing floating volatility patterns of AdCapital and Ares Management.
Diversification Opportunities for AdCapital and Ares Management
-0.86 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between AdCapital and Ares is -0.86. Overlapping area represents the amount of risk that can be diversified away by holding AdCapital AG 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 AdCapital 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 AdCapital AG 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 AdCapital i.e., AdCapital and Ares Management go up and down completely randomly.
Pair Corralation between AdCapital and Ares Management
Assuming the 90 days horizon AdCapital AG is expected to under-perform the Ares Management. In addition to that, AdCapital is 1.09 times more volatile than Ares Management Corp. It trades about -0.05 of its total potential returns per unit of risk. Ares Management Corp is currently generating about 0.11 per unit of volatility. If you would invest 12,611 in Ares Management Corp on September 3, 2024 and sell it today you would earn a total of 3,841 from holding Ares Management Corp or generate 30.46% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
AdCapital AG vs. Ares Management Corp
Performance |
| Timeline |
| AdCapital AG |
| Ares Management Corp |
AdCapital and Ares Management Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with AdCapital and Ares Management
The main advantage of trading using opposite AdCapital and Ares Management positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if AdCapital 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.| AdCapital vs. Blackstone Group | AdCapital vs. BlackRock | AdCapital vs. The Bank of | AdCapital vs. Ameriprise Financial |
| Ares Management vs. Blackstone Group | Ares Management vs. BlackRock | Ares Management vs. The Bank of | Ares Management vs. Ameriprise Financial |
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 Investing Opportunities module to build portfolios using our predefined set of ideas and optimize them against your investing preferences.
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