Correlation Between Ares Management and Investor
Can any of the company-specific risk be diversified away by investing in both Ares Management and Investor 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 Investor 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 Investor AB, you can compare the effects of market volatilities on Ares Management and Investor 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 Investor. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ares Management and Investor.
Diversification Opportunities for Ares Management and Investor
-0.22 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Ares and Investor is -0.22. Overlapping area represents the amount of risk that can be diversified away by holding Ares Management LP and Investor AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Investor AB 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 Investor. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Investor AB has no effect on the direction of Ares Management i.e., Ares Management and Investor go up and down completely randomly.
Pair Corralation between Ares Management and Investor
Given the investment horizon of 90 days Ares Management LP is expected to generate 0.84 times more return on investment than Investor. However, Ares Management LP is 1.19 times less risky than Investor. It trades about 0.13 of its potential returns per unit of risk. Investor AB is currently generating about 0.07 per unit of risk. If you would invest 10,677 in Ares Management LP on August 24, 2024 and sell it today you would earn a total of 6,824 from holding Ares Management LP or generate 63.91% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 73.2% |
| Values | Daily Returns |
Ares Management LP vs. Investor AB
Performance |
| Timeline |
| Ares Management LP |
| Investor AB |
Ares Management and Investor Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ares Management and Investor
The main advantage of trading using opposite Ares Management and Investor positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ares Management position performs unexpectedly, Investor 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 Investor will offset losses from the drop in Investor'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 |
| Investor vs. Brookfield Real Assets | Investor vs. T Rowe Price | Investor vs. Ares Capital | Investor vs. BlackRock |
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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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