Correlation Between Ares Capital and Bowen Acquisition
Can any of the company-specific risk be diversified away by investing in both Ares Capital and Bowen Acquisition 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 Capital and Bowen Acquisition into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Ares Capital and Bowen Acquisition Corp, you can compare the effects of market volatilities on Ares Capital and Bowen Acquisition 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 Capital with a short position of Bowen Acquisition. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ares Capital and Bowen Acquisition.
Diversification Opportunities for Ares Capital and Bowen Acquisition
-0.76 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Ares and Bowen is -0.76. Overlapping area represents the amount of risk that can be diversified away by holding Ares Capital and Bowen Acquisition Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bowen Acquisition Corp and Ares Capital 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 Capital are associated (or correlated) with Bowen Acquisition. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bowen Acquisition Corp has no effect on the direction of Ares Capital i.e., Ares Capital and Bowen Acquisition go up and down completely randomly.
Pair Corralation between Ares Capital and Bowen Acquisition
Given the investment horizon of 90 days Ares Capital is expected to generate 0.07 times more return on investment than Bowen Acquisition. However, Ares Capital is 14.95 times less risky than Bowen Acquisition. It trades about 0.5 of its potential returns per unit of risk. Bowen Acquisition Corp is currently generating about -0.16 per unit of risk. If you would invest 2,202 in Ares Capital on October 28, 2024 and sell it today you would earn a total of 141.00 from holding Ares Capital or generate 6.4% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Ares Capital vs. Bowen Acquisition Corp
Performance |
| Timeline |
| Ares Capital |
| Bowen Acquisition Corp |
Ares Capital and Bowen Acquisition Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ares Capital and Bowen Acquisition
The main advantage of trading using opposite Ares Capital and Bowen Acquisition positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ares Capital position performs unexpectedly, Bowen Acquisition 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 Bowen Acquisition will offset losses from the drop in Bowen Acquisition's long position.| Ares Capital vs. Triplepoint Venture Growth | Ares Capital vs. Sixth Street Specialty | Ares Capital vs. Main Street Capital | Ares Capital vs. Capital Southwest |
| Bowen Acquisition vs. National Vision Holdings | Bowen Acquisition vs. EMCOR Group | Bowen Acquisition vs. Amgen Inc | Bowen Acquisition vs. Teleflex Incorporated |
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 Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.
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