Correlation Between Vonovia SE and Ares Management
Can any of the company-specific risk be diversified away by investing in both Vonovia SE 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 Vonovia SE and Ares Management into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Vonovia SE and Ares Management Corp, you can compare the effects of market volatilities on Vonovia SE 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 Vonovia SE with a short position of Ares Management. Check out your portfolio center. Please also check ongoing floating volatility patterns of Vonovia SE and Ares Management.
Diversification Opportunities for Vonovia SE and Ares Management
-0.65 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Vonovia and Ares is -0.65. Overlapping area represents the amount of risk that can be diversified away by holding Vonovia SE 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 Vonovia SE 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 Vonovia SE 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 Vonovia SE i.e., Vonovia SE and Ares Management go up and down completely randomly.
Pair Corralation between Vonovia SE and Ares Management
Assuming the 90 days trading horizon Vonovia SE is expected to generate 1.14 times more return on investment than Ares Management. However, Vonovia SE is 1.14 times more volatile than Ares Management Corp. It trades about 0.18 of its potential returns per unit of risk. Ares Management Corp is currently generating about 0.15 per unit of risk. If you would invest 2,971 in Vonovia SE on September 13, 2024 and sell it today you would earn a total of 205.00 from holding Vonovia SE or generate 6.9% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Vonovia SE vs. Ares Management Corp
Performance |
| Timeline |
| Vonovia SE |
| Ares Management Corp |
Vonovia SE and Ares Management Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Vonovia SE and Ares Management
The main advantage of trading using opposite Vonovia SE and Ares Management positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Vonovia SE 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.| Vonovia SE vs. CompuGroup Medical SE | Vonovia SE vs. Xenia Hotels Resorts | Vonovia SE vs. Choice Hotels International | Vonovia SE vs. Sunstone Hotel Investors |
| Ares Management vs. Air Transport Services | Ares Management vs. USWE SPORTS AB | Ares Management vs. CSSC Offshore Marine | Ares Management vs. MIRAMAR HOTEL INV |
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 Financial Widgets module to easily integrated Macroaxis content with over 30 different plug-and-play financial widgets.
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