Correlation Between Ares Management and Janus Henderson
Can any of the company-specific risk be diversified away by investing in both Ares Management and Janus Henderson 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 Janus Henderson 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 Janus Henderson Group, you can compare the effects of market volatilities on Ares Management and Janus Henderson 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 Janus Henderson. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ares Management and Janus Henderson.
Diversification Opportunities for Ares Management and Janus Henderson
0.86 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Ares and Janus is 0.86. Overlapping area represents the amount of risk that can be diversified away by holding Ares Management LP and Janus Henderson Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Janus Henderson 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 Janus Henderson. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Janus Henderson Group has no effect on the direction of Ares Management i.e., Ares Management and Janus Henderson go up and down completely randomly.
Pair Corralation between Ares Management and Janus Henderson
Given the investment horizon of 90 days Ares Management LP is expected to generate 1.07 times more return on investment than Janus Henderson. However, Ares Management is 1.07 times more volatile than Janus Henderson Group. It trades about 0.12 of its potential returns per unit of risk. Janus Henderson Group is currently generating about 0.09 per unit of risk. If you would invest 6,505 in Ares Management LP on August 30, 2024 and sell it today you would earn a total of 10,973 from holding Ares Management LP or generate 168.69% 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. Janus Henderson Group
Performance |
| Timeline |
| Ares Management LP |
| Janus Henderson Group |
Ares Management and Janus Henderson Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ares Management and Janus Henderson
The main advantage of trading using opposite Ares Management and Janus Henderson positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ares Management position performs unexpectedly, Janus Henderson 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 Janus Henderson will offset losses from the drop in Janus Henderson's long position.| Ares Management vs. TPG Inc | Ares Management vs. Carlyle Secured Lending | Ares Management vs. Brookfield Corp |
| Janus Henderson vs. Franklin Resources | Janus Henderson vs. State Street Corp | Janus Henderson vs. Northern Trust | Janus Henderson vs. Principal Financial Group |
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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.
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