Correlation Between Tradeweb Markets and Ares Capital
Can any of the company-specific risk be diversified away by investing in both Tradeweb Markets and Ares Capital 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 Tradeweb Markets and Ares Capital into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Tradeweb Markets and Ares Capital, you can compare the effects of market volatilities on Tradeweb Markets and Ares Capital 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 Tradeweb Markets with a short position of Ares Capital. Check out your portfolio center. Please also check ongoing floating volatility patterns of Tradeweb Markets and Ares Capital.
Diversification Opportunities for Tradeweb Markets and Ares Capital
0.92 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Tradeweb and Ares is 0.92. Overlapping area represents the amount of risk that can be diversified away by holding Tradeweb Markets and Ares Capital in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ares Capital and Tradeweb Markets 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 Tradeweb Markets are associated (or correlated) with Ares Capital. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ares Capital has no effect on the direction of Tradeweb Markets i.e., Tradeweb Markets and Ares Capital go up and down completely randomly.
Pair Corralation between Tradeweb Markets and Ares Capital
Allowing for the 90-day total investment horizon Tradeweb Markets is expected to generate 1.69 times more return on investment than Ares Capital. However, Tradeweb Markets is 1.69 times more volatile than Ares Capital. It trades about 0.14 of its potential returns per unit of risk. Ares Capital is currently generating about 0.11 per unit of risk. If you would invest 13,126 in Tradeweb Markets on August 27, 2024 and sell it today you would earn a total of 473.00 from holding Tradeweb Markets or generate 3.6% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Tradeweb Markets vs. Ares Capital
Performance |
| Timeline |
| Tradeweb Markets |
| Ares Capital |
Tradeweb Markets and Ares Capital Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Tradeweb Markets and Ares Capital
The main advantage of trading using opposite Tradeweb Markets and Ares Capital positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Tradeweb Markets position performs unexpectedly, Ares Capital 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 Capital will offset losses from the drop in Ares Capital's long position.| Tradeweb Markets vs. Raymond James Financial | Tradeweb Markets vs. PJT Partners | Tradeweb Markets vs. Moelis Co | Tradeweb Markets vs. LPL Financial Holdings |
| Ares Capital vs. Triplepoint Venture Growth | Ares Capital vs. Sixth Street Specialty | Ares Capital vs. Main Street Capital | Ares Capital vs. Capital Southwest |
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 Commodity Directory module to find actively traded commodities issued by global exchanges.
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