Correlation Between Public Storage and Ares Management
Can any of the company-specific risk be diversified away by investing in both Public Storage 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 Public Storage and Ares Management into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Public Storage and Ares Management, you can compare the effects of market volatilities on Public Storage 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 Public Storage with a short position of Ares Management. Check out your portfolio center. Please also check ongoing floating volatility patterns of Public Storage and Ares Management.
Diversification Opportunities for Public Storage and Ares Management
0.05 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Public and Ares is 0.05. Overlapping area represents the amount of risk that can be diversified away by holding Public Storage and Ares Management in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ares Management and Public Storage 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 Public Storage 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 has no effect on the direction of Public Storage i.e., Public Storage and Ares Management go up and down completely randomly.
Pair Corralation between Public Storage and Ares Management
Assuming the 90 days trading horizon Public Storage is expected to under-perform the Ares Management. In addition to that, Public Storage is 1.2 times more volatile than Ares Management. It trades about -0.21 of its total potential returns per unit of risk. Ares Management is currently generating about -0.01 per unit of volatility. If you would invest 10,953 in Ares Management on October 12, 2024 and sell it today you would lose (61.00) from holding Ares Management or give up 0.56% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Public Storage vs. Ares Management
Performance |
| Timeline |
| Public Storage |
| Ares Management |
Public Storage and Ares Management Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Public Storage and Ares Management
The main advantage of trading using opposite Public Storage and Ares Management positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Public Storage 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.| Public Storage vs. Extra Space Storage | Public Storage vs. BTG Pactual Logstica | Public Storage vs. Energisa SA | Public Storage vs. Plano Plano Desenvolvimento |
| Ares Management vs. Verizon Communications | Ares Management vs. Bemobi Mobile Tech | Ares Management vs. Take Two Interactive Software | Ares Management vs. Guidewire Software, |
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 Sign In To Macroaxis module to sign in to explore Macroaxis' wealth optimization platform and fintech modules.
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