Correlation Between Ares Capital and Cartesian Growth
Can any of the company-specific risk be diversified away by investing in both Ares Capital and Cartesian Growth 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 Cartesian Growth into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Ares Capital and Cartesian Growth, you can compare the effects of market volatilities on Ares Capital and Cartesian Growth 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 Cartesian Growth. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ares Capital and Cartesian Growth.
Diversification Opportunities for Ares Capital and Cartesian Growth
-0.7 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Ares and Cartesian is -0.7. Overlapping area represents the amount of risk that can be diversified away by holding Ares Capital and Cartesian Growth in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cartesian Growth 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 Cartesian Growth. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Cartesian Growth has no effect on the direction of Ares Capital i.e., Ares Capital and Cartesian Growth go up and down completely randomly.
Pair Corralation between Ares Capital and Cartesian Growth
Given the investment horizon of 90 days Ares Capital is expected to generate 0.76 times more return on investment than Cartesian Growth. However, Ares Capital is 1.32 times less risky than Cartesian Growth. It trades about 0.13 of its potential returns per unit of risk. Cartesian Growth is currently generating about -0.09 per unit of risk. If you would invest 1,993 in Ares Capital on October 25, 2024 and sell it today you would earn a total of 345.00 from holding Ares Capital or generate 17.31% 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. Cartesian Growth
Performance |
| Timeline |
| Ares Capital |
| Cartesian Growth |
Ares Capital and Cartesian Growth Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ares Capital and Cartesian Growth
The main advantage of trading using opposite Ares Capital and Cartesian Growth positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ares Capital position performs unexpectedly, Cartesian Growth 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 Cartesian Growth will offset losses from the drop in Cartesian Growth's long position.| Ares Capital vs. MFS Investment Grade | Ares Capital vs. Eaton Vance National | Ares Capital vs. Nuveen California Select | Ares Capital vs. Federated Premier Municipal |
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 Center module to all portfolio management and optimization tools to improve performance of your portfolios.
Other Complementary Tools
| Funds Screener Find actively-traded funds from around the world traded on over 30 global exchanges | |
| Piotroski F Score Get Piotroski F Score based on the binary analysis strategy of nine different fundamentals | |
| Aroon Oscillator Analyze current equity momentum using Aroon Oscillator and other momentum ratios | |
| Commodity Directory Find actively traded commodities issued by global exchanges | |
| Instant Ratings Determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance |