Correlation Between Ares Management and Barclays Capital
Can any of the company-specific risk be diversified away by investing in both Ares Management and Barclays Capital 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 Barclays Capital 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 Barclays Capital, you can compare the effects of market volatilities on Ares Management and Barclays Capital 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 Barclays Capital. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ares Management and Barclays Capital.
Diversification Opportunities for Ares Management and Barclays Capital
0.66 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Ares and Barclays is 0.66. Overlapping area represents the amount of risk that can be diversified away by holding Ares Management LP and Barclays Capital in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Barclays 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 Barclays Capital. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Barclays Capital has no effect on the direction of Ares Management i.e., Ares Management and Barclays Capital go up and down completely randomly.
Pair Corralation between Ares Management and Barclays Capital
Given the investment horizon of 90 days Ares Management is expected to generate 172.23 times less return on investment than Barclays Capital. But when comparing it to its historical volatility, Ares Management LP is 109.09 times less risky than Barclays Capital. It trades about 0.11 of its potential returns per unit of risk. Barclays Capital is currently generating about 0.18 of returns per unit of risk over similar time horizon. If you would invest 94.00 in Barclays Capital on September 3, 2024 and sell it today you would earn a total of 7,268 from holding Barclays Capital or generate 7731.91% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 31.92% |
| Values | Daily Returns |
Ares Management LP vs. Barclays Capital
Performance |
| Timeline |
| Ares Management LP |
| Barclays Capital |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Ares Management and Barclays Capital Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ares Management and Barclays Capital
The main advantage of trading using opposite Ares Management and Barclays Capital positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ares Management position performs unexpectedly, Barclays Capital 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 Barclays Capital will offset losses from the drop in Barclays Capital'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 |
| Barclays Capital vs. Sprott Physical Silver | Barclays Capital vs. Blue Owl Capital | Barclays Capital vs. Ares Management LP | Barclays Capital vs. Sprott Inc |
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 Content Syndication module to quickly integrate customizable finance content to your own investment portal.
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