Correlation Between Blackrock International and Ares Management
Can any of the company-specific risk be diversified away by investing in both Blackrock International and Ares Management 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 Blackrock International and Ares Management into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Blackrock International Growth and Ares Management LP, you can compare the effects of market volatilities on Blackrock International and Ares Management 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 Blackrock International with a short position of Ares Management. Check out your portfolio center. Please also check ongoing floating volatility patterns of Blackrock International and Ares Management.
Diversification Opportunities for Blackrock International and Ares Management
-0.18 | Correlation Coefficient |
Good diversification
The 3 months correlation between Blackrock and Ares is -0.18. Overlapping area represents the amount of risk that can be diversified away by holding Blackrock International Growth and Ares Management LP in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ares Management LP and Blackrock International 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 Blackrock International Growth are associated (or correlated) with Ares Management. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ares Management LP has no effect on the direction of Blackrock International i.e., Blackrock International and Ares Management go up and down completely randomly.
Pair Corralation between Blackrock International and Ares Management
Considering the 90-day investment horizon Blackrock International is expected to generate 3.11 times less return on investment than Ares Management. But when comparing it to its historical volatility, Blackrock International Growth is 1.87 times less risky than Ares Management. It trades about 0.07 of its potential returns per unit of risk. Ares Management LP is currently generating about 0.12 of returns per unit of risk over similar time horizon. If you would invest 10,777 in Ares Management LP on September 4, 2024 and sell it today you would earn a total of 6,618 from holding Ares Management LP or generate 61.41% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Blackrock International Growth vs. Ares Management LP
Performance |
| Timeline |
| Blackrock International |
| Ares Management LP |
Blackrock International and Ares Management Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Blackrock International and Ares Management
The main advantage of trading using opposite Blackrock International and Ares Management positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Blackrock International position performs unexpectedly, Ares Management 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 Ares Management will offset losses from the drop in Ares Management's long position.| Blackrock International vs. Blackrock Enhanced Equity | Blackrock International vs. Eaton Vance Tax | Blackrock International vs. Blackrock Resources Commodities | Blackrock International vs. BlackRock MIT II |
| Ares Management vs. KKR Co LP | Ares Management vs. Carlyle Group | Ares Management vs. Blackstone Group | Ares Management vs. Blue Owl Capital |
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 Suggestion module to get suggestions outside of your existing asset allocation including your own model portfolios.
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