Correlation Between Ares Management and Blackstone
Can any of the company-specific risk be diversified away by investing in both Ares Management and Blackstone 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 Blackstone 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 Blackstone Group, you can compare the effects of market volatilities on Ares Management and Blackstone 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 Blackstone. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ares Management and Blackstone.
Diversification Opportunities for Ares Management and Blackstone
0.91 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Ares and Blackstone is 0.91. Overlapping area represents the amount of risk that can be diversified away by holding Ares Management LP and Blackstone Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Blackstone Group 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 Blackstone. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Blackstone Group has no effect on the direction of Ares Management i.e., Ares Management and Blackstone go up and down completely randomly.
Pair Corralation between Ares Management and Blackstone
Given the investment horizon of 90 days Ares Management is expected to generate 1.83 times less return on investment than Blackstone. But when comparing it to its historical volatility, Ares Management LP is 1.02 times less risky than Blackstone. It trades about 0.18 of its potential returns per unit of risk. Blackstone Group is currently generating about 0.32 of returns per unit of risk over similar time horizon. If you would invest 13,856 in Blackstone Group on August 23, 2024 and sell it today you would earn a total of 5,545 from holding Blackstone Group or generate 40.02% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Ares Management LP vs. Blackstone Group
Performance |
| Timeline |
| Ares Management LP |
| Blackstone Group |
Ares Management and Blackstone Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ares Management and Blackstone
The main advantage of trading using opposite Ares Management and Blackstone positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ares Management position performs unexpectedly, Blackstone 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 Blackstone will offset losses from the drop in Blackstone'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 |
| Blackstone vs. T Rowe Price | Blackstone vs. State Street Corp | Blackstone vs. KKR Co LP | Blackstone vs. Brookfield Asset Management |
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 Alpha Finder module to use alpha and beta coefficients to find investment opportunities after accounting for the risk.
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