Correlation Between AIR LIQUIDE and Ares Management
Can any of the company-specific risk be diversified away by investing in both AIR LIQUIDE 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 AIR LIQUIDE and Ares Management into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between AIR LIQUIDE ADR and Ares Management Corp, you can compare the effects of market volatilities on AIR LIQUIDE 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 AIR LIQUIDE with a short position of Ares Management. Check out your portfolio center. Please also check ongoing floating volatility patterns of AIR LIQUIDE and Ares Management.
Diversification Opportunities for AIR LIQUIDE and Ares Management
-0.8 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between AIR and Ares is -0.8. Overlapping area represents the amount of risk that can be diversified away by holding AIR LIQUIDE ADR 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 AIR LIQUIDE 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 AIR LIQUIDE ADR 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 AIR LIQUIDE i.e., AIR LIQUIDE and Ares Management go up and down completely randomly.
Pair Corralation between AIR LIQUIDE and Ares Management
Assuming the 90 days trading horizon AIR LIQUIDE ADR is expected to generate 0.48 times more return on investment than Ares Management. However, AIR LIQUIDE ADR is 2.07 times less risky than Ares Management. It trades about -0.03 of its potential returns per unit of risk. Ares Management Corp is currently generating about -0.03 per unit of risk. If you would invest 3,100 in AIR LIQUIDE ADR on September 22, 2024 and sell it today you would lose (20.00) from holding AIR LIQUIDE ADR or give up 0.65% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
AIR LIQUIDE ADR vs. Ares Management Corp
Performance |
| Timeline |
| AIR LIQUIDE ADR |
| Ares Management Corp |
AIR LIQUIDE and Ares Management Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with AIR LIQUIDE and Ares Management
The main advantage of trading using opposite AIR LIQUIDE and Ares Management positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if AIR LIQUIDE 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.| AIR LIQUIDE vs. Cleanaway Waste Management | AIR LIQUIDE vs. GREENX METALS LTD | AIR LIQUIDE vs. AGF Management Limited | AIR LIQUIDE vs. Brockhaus Capital Management |
| Ares Management vs. Ameriprise Financial | Ares Management vs. Superior Plus Corp | Ares Management vs. SIVERS SEMICONDUCTORS AB | Ares Management vs. CHINA HUARONG ENERHD 50 |
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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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