Correlation Between Ares Management and Oxford Lane
Can any of the company-specific risk be diversified away by investing in both Ares Management and Oxford Lane 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 Oxford Lane 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 Oxford Lane Capital, you can compare the effects of market volatilities on Ares Management and Oxford Lane 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 Oxford Lane. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ares Management and Oxford Lane.
Diversification Opportunities for Ares Management and Oxford Lane
0.89 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Ares and Oxford is 0.89. Overlapping area represents the amount of risk that can be diversified away by holding Ares Management LP and Oxford Lane Capital in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Oxford Lane Capital 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 Oxford Lane. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Oxford Lane Capital has no effect on the direction of Ares Management i.e., Ares Management and Oxford Lane go up and down completely randomly.
Pair Corralation between Ares Management and Oxford Lane
Given the investment horizon of 90 days Ares Management LP is expected to generate 4.24 times more return on investment than Oxford Lane. However, Ares Management is 4.24 times more volatile than Oxford Lane Capital. It trades about 0.08 of its potential returns per unit of risk. Oxford Lane Capital is currently generating about -0.03 per unit of risk. If you would invest 17,098 in Ares Management LP on August 28, 2024 and sell it today you would earn a total of 505.00 from holding Ares Management LP or generate 2.95% 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. Oxford Lane Capital
Performance |
| Timeline |
| Ares Management LP |
| Oxford Lane Capital |
Ares Management and Oxford Lane Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ares Management and Oxford Lane
The main advantage of trading using opposite Ares Management and Oxford Lane positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ares Management position performs unexpectedly, Oxford Lane 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 Oxford Lane will offset losses from the drop in Oxford Lane'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 |
| Oxford Lane vs. The Gabelli Multimedia | Oxford Lane vs. The Gabelli Multimedia | Oxford Lane vs. The Gabelli Dividend | Oxford Lane vs. The Gabelli Equity |
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 Idea Optimizer module to use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio .
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