Correlation Between Ares Management and SBI Holdings
Can any of the company-specific risk be diversified away by investing in both Ares Management and SBI Holdings 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 SBI Holdings 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 SBI Holdings, you can compare the effects of market volatilities on Ares Management and SBI Holdings 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 SBI Holdings. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ares Management and SBI Holdings.
Diversification Opportunities for Ares Management and SBI Holdings
-0.53 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Ares and SBI is -0.53. Overlapping area represents the amount of risk that can be diversified away by holding Ares Management LP and SBI Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SBI Holdings 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 SBI Holdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SBI Holdings has no effect on the direction of Ares Management i.e., Ares Management and SBI Holdings go up and down completely randomly.
Pair Corralation between Ares Management and SBI Holdings
Given the investment horizon of 90 days Ares Management is expected to generate 4.87 times less return on investment than SBI Holdings. But when comparing it to its historical volatility, Ares Management LP is 1.73 times less risky than SBI Holdings. It trades about 0.08 of its potential returns per unit of risk. SBI Holdings is currently generating about 0.21 of returns per unit of risk over similar time horizon. If you would invest 2,100 in SBI Holdings on August 27, 2024 and sell it today you would earn a total of 300.00 from holding SBI Holdings or generate 14.29% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Ares Management LP vs. SBI Holdings
Performance |
| Timeline |
| Ares Management LP |
| SBI Holdings |
Ares Management and SBI Holdings Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ares Management and SBI Holdings
The main advantage of trading using opposite Ares Management and SBI Holdings positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ares Management position performs unexpectedly, SBI Holdings 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 SBI Holdings will offset losses from the drop in SBI Holdings' long position.| Ares Management vs. KKR Co LP | Ares Management vs. Carlyle Group | Ares Management vs. Blackstone Group | Ares Management vs. Blue Owl Capital |
| SBI Holdings vs. Blackstone Group | SBI Holdings vs. BlackRock | SBI Holdings vs. Apollo Global Management | SBI Holdings vs. Bank of New |
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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