Correlation Between Ares Management and Eaton Vance
Can any of the company-specific risk be diversified away by investing in both Ares Management and Eaton Vance 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 Eaton Vance 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 Eaton Vance Tax, you can compare the effects of market volatilities on Ares Management and Eaton Vance 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 Eaton Vance. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ares Management and Eaton Vance.
Diversification Opportunities for Ares Management and Eaton Vance
0.94 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Ares and Eaton is 0.94. Overlapping area represents the amount of risk that can be diversified away by holding Ares Management LP and Eaton Vance Tax in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Eaton Vance Tax 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 Eaton Vance. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Eaton Vance Tax has no effect on the direction of Ares Management i.e., Ares Management and Eaton Vance go up and down completely randomly.
Pair Corralation between Ares Management and Eaton Vance
Given the investment horizon of 90 days Ares Management LP is expected to generate 2.06 times more return on investment than Eaton Vance. However, Ares Management is 2.06 times more volatile than Eaton Vance Tax. It trades about 0.12 of its potential returns per unit of risk. Eaton Vance Tax is currently generating about 0.13 per unit of risk. If you would invest 13,772 in Ares Management LP on September 3, 2024 and sell it today you would earn a total of 3,901 from holding Ares Management LP or generate 28.33% 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. Eaton Vance Tax
Performance |
| Timeline |
| Ares Management LP |
| Eaton Vance Tax |
Ares Management and Eaton Vance Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ares Management and Eaton Vance
The main advantage of trading using opposite Ares Management and Eaton Vance positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ares Management position performs unexpectedly, Eaton Vance 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 Eaton Vance will offset losses from the drop in Eaton Vance'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 |
| Eaton Vance vs. Eaton Vance Tax | Eaton Vance vs. Eaton Vance Tax Managed | Eaton Vance vs. Eaton Vance Risk | Eaton Vance vs. Eaton Vance Tax |
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 Content Syndication module to quickly integrate customizable finance content to your own investment portal.
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