Correlation Between Ares Management and LANDSEA GREEN

Can any of the company-specific risk be diversified away by investing in both Ares Management and LANDSEA GREEN 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 Ares Management and LANDSEA GREEN into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Ares Management Corp and LANDSEA GREEN MANAGEMENT, you can compare the effects of market volatilities on Ares Management and LANDSEA GREEN 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 Ares Management with a short position of LANDSEA GREEN. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ares Management and LANDSEA GREEN.

Diversification Opportunities for Ares Management and LANDSEA GREEN

0.0

Correlation Coefficient

Ares Management  LANDSEA GREEN

Pay attention - limited upside

The 3 months correlation between Ares and LANDSEA is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Ares Management Corp and LANDSEA GREEN MANAGEMENT in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on LANDSEA GREEN MANAGEMENT and Ares Management 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 Ares Management Corp are associated (or correlated) with LANDSEA GREEN. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of LANDSEA GREEN MANAGEMENT has no effect on the direction of Ares Management i.e., Ares Management and LANDSEA GREEN go up and down completely randomly.

Pair Corralation between Ares Management and LANDSEA GREEN

If you would invest  16,831  in Ares Management Corp on October 10, 2024 and sell it today you would earn a total of  671.00  from holding Ares Management Corp or generate 3.99% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

Ares Management Corp  vs.  LANDSEA GREEN MANAGEMENT

Ares Management Corp

Risk-Adjusted Performance

12 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Ares Management Corp are ranked lower than 12 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, Ares Management reported solid returns over the last few months and may actually be approaching a breakup point.

LANDSEA GREEN MANAGEMENT

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days LANDSEA GREEN MANAGEMENT has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable basic indicators, LANDSEA GREEN is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

Pair Trading with Ares Management and LANDSEA GREEN

The main advantage of trading using opposite Ares Management and LANDSEA GREEN positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ares Management position performs unexpectedly, LANDSEA GREEN 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 LANDSEA GREEN will offset losses from the drop in LANDSEA GREEN's long position.

The idea behind Ares Management Corp and LANDSEA GREEN MANAGEMENT pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.