Correlation Between Ares Management and Sofina Société
Can any of the company-specific risk be diversified away by investing in both Ares Management and Sofina Société 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 Sofina Société 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 Sofina Socit Anonyme, you can compare the effects of market volatilities on Ares Management and Sofina Société 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 Sofina Société. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ares Management and Sofina Société.
Diversification Opportunities for Ares Management and Sofina Société
-0.55 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Ares and Sofina is -0.55. Overlapping area represents the amount of risk that can be diversified away by holding Ares Management LP and Sofina Socit Anonyme in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sofina Socit Anonyme 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 Sofina Société. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sofina Socit Anonyme has no effect on the direction of Ares Management i.e., Ares Management and Sofina Société go up and down completely randomly.
Pair Corralation between Ares Management and Sofina Société
Given the investment horizon of 90 days Ares Management LP is expected to generate 0.93 times more return on investment than Sofina Société. However, Ares Management LP is 1.07 times less risky than Sofina Société. It trades about 0.11 of its potential returns per unit of risk. Sofina Socit Anonyme is currently generating about 0.02 per unit of risk. If you would invest 7,280 in Ares Management LP on September 3, 2024 and sell it today you would earn a total of 10,115 from holding Ares Management LP or generate 138.94% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 59.58% |
| Values | Daily Returns |
Ares Management LP vs. Sofina Socit Anonyme
Performance |
| Timeline |
| Ares Management LP |
| Sofina Socit Anonyme |
Ares Management and Sofina Société Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ares Management and Sofina Société
The main advantage of trading using opposite Ares Management and Sofina Société positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ares Management position performs unexpectedly, Sofina Société 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 Sofina Société will offset losses from the drop in Sofina Société'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 |
| Sofina Société vs. Marygold Companies | Sofina Société vs. Carbon Streaming Corp | Sofina Société vs. Arrowmark Financial Corp | Sofina Société vs. Patria Investments |
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 FinTech Suite module to use AI to screen and filter profitable investment opportunities.
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