Correlation Between Ares Management and Carlyle Secured
Can any of the company-specific risk be diversified away by investing in both Ares Management and Carlyle Secured 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 Carlyle Secured 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 Carlyle Secured Lending, you can compare the effects of market volatilities on Ares Management and Carlyle Secured 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 Carlyle Secured. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ares Management and Carlyle Secured.
Diversification Opportunities for Ares Management and Carlyle Secured
0.85 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Ares and Carlyle is 0.85. Overlapping area represents the amount of risk that can be diversified away by holding Ares Management LP and Carlyle Secured Lending in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Carlyle Secured Lending 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 Carlyle Secured. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Carlyle Secured Lending has no effect on the direction of Ares Management i.e., Ares Management and Carlyle Secured go up and down completely randomly.
Pair Corralation between Ares Management and Carlyle Secured
Given the investment horizon of 90 days Ares Management LP is expected to generate 1.95 times more return on investment than Carlyle Secured. However, Ares Management is 1.95 times more volatile than Carlyle Secured Lending. It trades about 0.2 of its potential returns per unit of risk. Carlyle Secured Lending is currently generating about 0.23 per unit of risk. If you would invest 16,105 in Ares Management LP on November 1, 2024 and sell it today you would earn a total of 3,703 from holding Ares Management LP or generate 22.99% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Ares Management LP vs. Carlyle Secured Lending
Performance |
| Timeline |
| Ares Management LP |
| Carlyle Secured Lending |
Ares Management and Carlyle Secured Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ares Management and Carlyle Secured
The main advantage of trading using opposite Ares Management and Carlyle Secured positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ares Management position performs unexpectedly, Carlyle Secured 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 Carlyle Secured will offset losses from the drop in Carlyle Secured'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 |
| Carlyle Secured vs. Sixth Street Specialty | Carlyle Secured vs. Golub Capital BDC | Carlyle Secured vs. Fidus Investment Corp | Carlyle Secured vs. New Mountain Finance |
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 Anywhere module to track or share privately all of your investments from the convenience of any device.
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