Correlation Between Ares Management and Bowen Acquisition
Can any of the company-specific risk be diversified away by investing in both Ares Management 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 Management 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 Management LP and Bowen Acquisition Corp, you can compare the effects of market volatilities on Ares Management 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 Management with a short position of Bowen Acquisition. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ares Management and Bowen Acquisition.
Diversification Opportunities for Ares Management and Bowen Acquisition
-0.64 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Ares and Bowen is -0.64. Overlapping area represents the amount of risk that can be diversified away by holding Ares Management LP 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 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 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 Management i.e., Ares Management and Bowen Acquisition go up and down completely randomly.
Pair Corralation between Ares Management and Bowen Acquisition
Given the investment horizon of 90 days Ares Management LP is expected to generate 0.16 times more return on investment than Bowen Acquisition. However, Ares Management LP is 6.15 times less risky than Bowen Acquisition. It trades about 0.32 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 17,950 in Ares Management LP on October 28, 2024 and sell it today you would earn a total of 1,782 from holding Ares Management LP or generate 9.93% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Ares Management LP vs. Bowen Acquisition Corp
Performance |
| Timeline |
| Ares Management LP |
| Bowen Acquisition Corp |
Ares Management and Bowen Acquisition Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ares Management and Bowen Acquisition
The main advantage of trading using opposite Ares Management and Bowen Acquisition positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ares Management 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 Management vs. Carlyle Group | Ares Management vs. Blue Owl Capital | Ares Management vs. TPG Inc | Ares Management vs. Patria Investments |
| 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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.
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