Correlation Between Ares Dynamic and CBH
Can any of the company-specific risk be diversified away by investing in both Ares Dynamic and CBH 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 Dynamic and CBH into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Ares Dynamic Credit and CBH, you can compare the effects of market volatilities on Ares Dynamic and CBH 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 Dynamic with a short position of CBH. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ares Dynamic and CBH.
Diversification Opportunities for Ares Dynamic and CBH
0.09 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Ares and CBH is 0.09. Overlapping area represents the amount of risk that can be diversified away by holding Ares Dynamic Credit and CBH in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CBH and Ares Dynamic 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 Dynamic Credit are associated (or correlated) with CBH. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CBH has no effect on the direction of Ares Dynamic i.e., Ares Dynamic and CBH go up and down completely randomly.
Pair Corralation between Ares Dynamic and CBH
If you would invest 1,501 in Ares Dynamic Credit on August 27, 2024 and sell it today you would earn a total of 26.00 from holding Ares Dynamic Credit or generate 1.73% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 4.76% |
| Values | Daily Returns |
Ares Dynamic Credit vs. CBH
Performance |
| Timeline |
| Ares Dynamic Credit |
| CBH |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Ares Dynamic and CBH Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ares Dynamic and CBH
The main advantage of trading using opposite Ares Dynamic and CBH positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ares Dynamic position performs unexpectedly, CBH 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 CBH will offset losses from the drop in CBH's long position.| Ares Dynamic vs. Eaton Vance Floating | Ares Dynamic vs. NXG NextGen Infrastructure | Ares Dynamic vs. GAMCO Natural Resources | Ares Dynamic vs. MFS Investment Grade |
| CBH vs. MFS Investment Grade | CBH vs. Invesco High Income | CBH vs. Eaton Vance National | CBH vs. Nuveen California Select |
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 Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.
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