Correlation Between Platinum Group and Ares Management
Can any of the company-specific risk be diversified away by investing in both Platinum Group 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 Platinum Group and Ares Management into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Platinum Group Metals and Ares Management Corp, you can compare the effects of market volatilities on Platinum Group 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 Platinum Group with a short position of Ares Management. Check out your portfolio center. Please also check ongoing floating volatility patterns of Platinum Group and Ares Management.
Diversification Opportunities for Platinum Group and Ares Management
-0.58 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Platinum and Ares is -0.58. Overlapping area represents the amount of risk that can be diversified away by holding Platinum Group Metals and Ares Management Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ares Management Corp and Platinum Group 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 Platinum Group Metals 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 Corp has no effect on the direction of Platinum Group i.e., Platinum Group and Ares Management go up and down completely randomly.
Pair Corralation between Platinum Group and Ares Management
Assuming the 90 days trading horizon Platinum Group is expected to generate 3.51 times less return on investment than Ares Management. In addition to that, Platinum Group is 2.37 times more volatile than Ares Management Corp. It trades about 0.01 of its total potential returns per unit of risk. Ares Management Corp is currently generating about 0.12 per unit of volatility. If you would invest 7,019 in Ares Management Corp on October 22, 2024 and sell it today you would earn a total of 11,467 from holding Ares Management Corp or generate 163.37% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 99.8% |
| Values | Daily Returns |
Platinum Group Metals vs. Ares Management Corp
Performance |
| Timeline |
| Platinum Group Metals |
| Ares Management Corp |
Platinum Group and Ares Management Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Platinum Group and Ares Management
The main advantage of trading using opposite Platinum Group and Ares Management positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Platinum Group 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.| Platinum Group vs. MeVis Medical Solutions | Platinum Group vs. Diamyd Medical AB | Platinum Group vs. DISTRICT METALS | Platinum Group vs. ONWARD MEDICAL BV |
| Ares Management vs. Northern Data AG | Ares Management vs. Linedata Services SA | Ares Management vs. Sun Life Financial | Ares Management vs. Hyrican Informationssysteme Aktiengesellschaft |
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 Crypto Correlations module to use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins.
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