Correlation Between Ares Capital and HelloFresh
Can any of the company-specific risk be diversified away by investing in both Ares Capital and HelloFresh 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 HelloFresh into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Ares Capital and HelloFresh SE, you can compare the effects of market volatilities on Ares Capital and HelloFresh 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 HelloFresh. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ares Capital and HelloFresh.
Diversification Opportunities for Ares Capital and HelloFresh
0.7 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Ares and HelloFresh is 0.7. Overlapping area represents the amount of risk that can be diversified away by holding Ares Capital and HelloFresh SE in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on HelloFresh SE 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 HelloFresh. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of HelloFresh SE has no effect on the direction of Ares Capital i.e., Ares Capital and HelloFresh go up and down completely randomly.
Pair Corralation between Ares Capital and HelloFresh
Given the investment horizon of 90 days Ares Capital is expected to generate 0.15 times more return on investment than HelloFresh. However, Ares Capital is 6.68 times less risky than HelloFresh. It trades about 0.11 of its potential returns per unit of risk. HelloFresh SE is currently generating about 0.0 per unit of risk. If you would invest 1,650 in Ares Capital on September 2, 2024 and sell it today you would earn a total of 565.00 from holding Ares Capital or generate 34.24% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Ares Capital vs. HelloFresh SE
Performance |
| Timeline |
| Ares Capital |
| HelloFresh SE |
Ares Capital and HelloFresh Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ares Capital and HelloFresh
The main advantage of trading using opposite Ares Capital and HelloFresh positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ares Capital position performs unexpectedly, HelloFresh 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 HelloFresh will offset losses from the drop in HelloFresh'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 |
| HelloFresh vs. Biglari Holdings | HelloFresh vs. Potbelly Co | HelloFresh vs. Restaurant Brands International | HelloFresh vs. Red Robin Gourmet |
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 Sync Your Broker module to sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors..
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