Correlation Between Ares Management and Helios Fairfax
Can any of the company-specific risk be diversified away by investing in both Ares Management and Helios Fairfax 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 Helios Fairfax 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 Helios Fairfax Partners, you can compare the effects of market volatilities on Ares Management and Helios Fairfax 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 Helios Fairfax. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ares Management and Helios Fairfax.
Diversification Opportunities for Ares Management and Helios Fairfax
0.78 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Ares and Helios is 0.78. Overlapping area represents the amount of risk that can be diversified away by holding Ares Management LP and Helios Fairfax Partners in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Helios Fairfax Partners 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 Helios Fairfax. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Helios Fairfax Partners has no effect on the direction of Ares Management i.e., Ares Management and Helios Fairfax go up and down completely randomly.
Pair Corralation between Ares Management and Helios Fairfax
Given the investment horizon of 90 days Ares Management LP is expected to generate 0.53 times more return on investment than Helios Fairfax. However, Ares Management LP is 1.9 times less risky than Helios Fairfax. It trades about 0.11 of its potential returns per unit of risk. Helios Fairfax Partners is currently generating about 0.01 per unit of risk. If you would invest 6,907 in Ares Management LP on September 3, 2024 and sell it today you would earn a total of 10,488 from holding Ares Management LP or generate 151.85% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Ares Management LP vs. Helios Fairfax Partners
Performance |
| Timeline |
| Ares Management LP |
| Helios Fairfax Partners |
Ares Management and Helios Fairfax Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ares Management and Helios Fairfax
The main advantage of trading using opposite Ares Management and Helios Fairfax positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ares Management position performs unexpectedly, Helios Fairfax 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 Helios Fairfax will offset losses from the drop in Helios Fairfax'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 |
| Helios Fairfax vs. Blackrock International Growth | Helios Fairfax vs. Blackrock Enhanced Equity | Helios Fairfax vs. Eaton Vance Tax | Helios Fairfax vs. Blackrock Resources Commodities |
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 Earnings Calls module to check upcoming earnings announcements updated hourly across public exchanges.
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