Correlation Between Ares Management and Aimia
Can any of the company-specific risk be diversified away by investing in both Ares Management and Aimia 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 Management and Aimia into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Ares Management LP and Aimia Inc, you can compare the effects of market volatilities on Ares Management and Aimia 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 Management with a short position of Aimia. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ares Management and Aimia.
Diversification Opportunities for Ares Management and Aimia
-0.59 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Ares and Aimia is -0.59. Overlapping area represents the amount of risk that can be diversified away by holding Ares Management LP and Aimia Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Aimia Inc and Ares Management 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 Management LP are associated (or correlated) with Aimia. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Aimia Inc has no effect on the direction of Ares Management i.e., Ares Management and Aimia go up and down completely randomly.
Pair Corralation between Ares Management and Aimia
Given the investment horizon of 90 days Ares Management LP is expected to generate 0.79 times more return on investment than Aimia. However, Ares Management LP is 1.26 times less risky than Aimia. It trades about 0.12 of its potential returns per unit of risk. Aimia Inc is currently generating about -0.02 per unit of risk. If you would invest 6,812 in Ares Management LP on August 25, 2024 and sell it today you would earn a total of 10,740 from holding Ares Management LP or generate 157.66% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 99.8% |
| Values | Daily Returns |
Ares Management LP vs. Aimia Inc
Performance |
| Timeline |
| Ares Management LP |
| Aimia Inc |
Ares Management and Aimia Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ares Management and Aimia
The main advantage of trading using opposite Ares Management and Aimia positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ares Management position performs unexpectedly, Aimia 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 Aimia will offset losses from the drop in Aimia's long position.| Ares Management vs. KKR Co LP | Ares Management vs. Carlyle Group | Ares Management vs. Blackstone Group | Ares Management vs. Blue Owl Capital |
| Aimia vs. Flow Capital Corp | Aimia vs. Ameritrans Capital Corp | Aimia vs. Blackhawk Growth Corp | Aimia vs. Azimut Holding SpA |
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 Bond Analysis module to evaluate and analyze corporate bonds as a potential investment for your portfolios..
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