Correlation Between Ares Management and Carbon Streaming
Can any of the company-specific risk be diversified away by investing in both Ares Management and Carbon Streaming 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 Carbon Streaming 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 Carbon Streaming Corp, you can compare the effects of market volatilities on Ares Management and Carbon Streaming 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 Carbon Streaming. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ares Management and Carbon Streaming.
Diversification Opportunities for Ares Management and Carbon Streaming
-0.87 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Ares and Carbon is -0.87. Overlapping area represents the amount of risk that can be diversified away by holding Ares Management LP and Carbon Streaming Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Carbon Streaming Corp 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 Carbon Streaming. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Carbon Streaming Corp has no effect on the direction of Ares Management i.e., Ares Management and Carbon Streaming go up and down completely randomly.
Pair Corralation between Ares Management and Carbon Streaming
Given the investment horizon of 90 days Ares Management LP is expected to generate 0.24 times more return on investment than Carbon Streaming. However, Ares Management LP is 4.15 times less risky than Carbon Streaming. It trades about 0.12 of its potential returns per unit of risk. Carbon Streaming Corp is currently generating about -0.01 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 Against |
| Strength | Significant |
| Accuracy | 99.8% |
| Values | Daily Returns |
Ares Management LP vs. Carbon Streaming Corp
Performance |
| Timeline |
| Ares Management LP |
| Carbon Streaming Corp |
Ares Management and Carbon Streaming Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ares Management and Carbon Streaming
The main advantage of trading using opposite Ares Management and Carbon Streaming positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ares Management position performs unexpectedly, Carbon Streaming 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 Carbon Streaming will offset losses from the drop in Carbon Streaming's long position.| Ares Management vs. TPG Inc | Ares Management vs. Carlyle Secured Lending | Ares Management vs. Brookfield Corp |
| Carbon Streaming vs. Elysee Development Corp | Carbon Streaming vs. Agronomics Limited | Carbon Streaming vs. Aimia Inc | Carbon Streaming vs. Azimut Holding SpA |
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 Bollinger Bands module to use Bollinger Bands indicator to analyze target price for a given investing horizon.
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