Correlation Between Blackstone and Ares Management
Can any of the company-specific risk be diversified away by investing in both Blackstone 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 Blackstone and Ares Management into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Blackstone Group and Ares Management LP, you can compare the effects of market volatilities on Blackstone 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 Blackstone with a short position of Ares Management. Check out your portfolio center. Please also check ongoing floating volatility patterns of Blackstone and Ares Management.
Diversification Opportunities for Blackstone and Ares Management
-0.18 | Correlation Coefficient |
Good diversification
The 3 months correlation between Blackstone and Ares is -0.18. Overlapping area represents the amount of risk that can be diversified away by holding Blackstone Group 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 Blackstone 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 Blackstone Group 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 Blackstone i.e., Blackstone and Ares Management go up and down completely randomly.
Pair Corralation between Blackstone and Ares Management
Allowing for the 90-day total investment horizon Blackstone Group is expected to under-perform the Ares Management. In addition to that, Blackstone is 1.14 times more volatile than Ares Management LP. It trades about -0.2 of its total potential returns per unit of risk. Ares Management LP is currently generating about -0.08 per unit of volatility. If you would invest 19,132 in Ares Management LP on November 18, 2024 and sell it today you would lose (514.00) from holding Ares Management LP or give up 2.69% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Blackstone Group vs. Ares Management LP
Performance |
| Timeline |
| Blackstone Group |
| Ares Management LP |
Blackstone and Ares Management Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Blackstone and Ares Management
The main advantage of trading using opposite Blackstone and Ares Management positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Blackstone 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.| Blackstone vs. T Rowe Price | Blackstone vs. State Street Corp | Blackstone vs. KKR Co LP | Blackstone vs. Brookfield Asset Management |
| 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 USA ETFs module to find actively traded Exchange Traded Funds (ETF) in USA.
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