Correlation Between Ares Management and United States
Can any of the company-specific risk be diversified away by investing in both Ares Management and United States 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 United States 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 United States Gasoline, you can compare the effects of market volatilities on Ares Management and United States 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 United States. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ares Management and United States.
Diversification Opportunities for Ares Management and United States
0.54 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Ares and United is 0.54. Overlapping area represents the amount of risk that can be diversified away by holding Ares Management LP and United States Gasoline in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on United States Gasoline 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 United States. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of United States Gasoline has no effect on the direction of Ares Management i.e., Ares Management and United States go up and down completely randomly.
Pair Corralation between Ares Management and United States
Given the investment horizon of 90 days Ares Management LP is expected to generate 1.07 times more return on investment than United States. However, Ares Management is 1.07 times more volatile than United States Gasoline. It trades about 0.11 of its potential returns per unit of risk. United States Gasoline is currently generating about -0.04 per unit of risk. If you would invest 13,437 in Ares Management LP on September 3, 2024 and sell it today you would earn a total of 4,236 from holding Ares Management LP or generate 31.52% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Ares Management LP vs. United States Gasoline
Performance |
| Timeline |
| Ares Management LP |
| United States Gasoline |
Ares Management and United States Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ares Management and United States
The main advantage of trading using opposite Ares Management and United States positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ares Management position performs unexpectedly, United States 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 United States will offset losses from the drop in United States' long position.| Ares Management vs. KKR Co LP | Ares Management vs. Carlyle Group | Ares Management vs. Blackstone Group | Ares Management vs. Blue Owl Capital |
| United States vs. Sprott Physical Silver | United States vs. Blue Owl Capital | United States vs. Ares Management LP | United States 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 Portfolio Anywhere module to track or share privately all of your investments from the convenience of any device.
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