Correlation Between Ares Management and Credit Suisse
Can any of the company-specific risk be diversified away by investing in both Ares Management and Credit Suisse 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 Credit Suisse 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 Credit Suisse X Links, you can compare the effects of market volatilities on Ares Management and Credit Suisse 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 Credit Suisse. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ares Management and Credit Suisse.
Diversification Opportunities for Ares Management and Credit Suisse
0.2 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Ares and Credit is 0.2. Overlapping area represents the amount of risk that can be diversified away by holding Ares Management LP and Credit Suisse X Links in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Credit Suisse X 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 Credit Suisse. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Credit Suisse X has no effect on the direction of Ares Management i.e., Ares Management and Credit Suisse go up and down completely randomly.
Pair Corralation between Ares Management and Credit Suisse
Given the investment horizon of 90 days Ares Management LP is expected to generate 1.25 times more return on investment than Credit Suisse. However, Ares Management is 1.25 times more volatile than Credit Suisse X Links. It trades about 0.12 of its potential returns per unit of risk. Credit Suisse X Links is currently generating about 0.04 per unit of risk. If you would invest 6,907 in Ares Management LP on September 3, 2024 and sell it today you would earn a total of 10,766 from holding Ares Management LP or generate 155.87% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Ares Management LP vs. Credit Suisse X Links
Performance |
| Timeline |
| Ares Management LP |
| Credit Suisse X |
Ares Management and Credit Suisse Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ares Management and Credit Suisse
The main advantage of trading using opposite Ares Management and Credit Suisse positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ares Management position performs unexpectedly, Credit Suisse 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 Credit Suisse will offset losses from the drop in Credit Suisse'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 |
| Credit Suisse vs. Sprott Physical Silver | Credit Suisse vs. Blue Owl Capital | Credit Suisse vs. Ares Management LP | Credit Suisse 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 Insider Screener module to find insiders across different sectors to evaluate their impact on performance.
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