Correlation Between Ares Management and MEDCAW INVESTMENTS

Can any of the company-specific risk be diversified away by investing in both Ares Management and MEDCAW INVESTMENTS 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 MEDCAW INVESTMENTS 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 MEDCAW INVESTMENTS LS 01, you can compare the effects of market volatilities on Ares Management and MEDCAW INVESTMENTS 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 MEDCAW INVESTMENTS. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ares Management and MEDCAW INVESTMENTS.

Diversification Opportunities for Ares Management and MEDCAW INVESTMENTS

0.0

Correlation Coefficient

Ares Management  MEDCAW INVESTMENTS

Pay attention - limited upside

The 3 months correlation between Ares and MEDCAW is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Ares Management Corp and MEDCAW INVESTMENTS LS 01 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on MEDCAW INVESTMENTS 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 MEDCAW INVESTMENTS. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of MEDCAW INVESTMENTS has no effect on the direction of Ares Management i.e., Ares Management and MEDCAW INVESTMENTS go up and down completely randomly.

Pair Corralation between Ares Management and MEDCAW INVESTMENTS

If you would invest  4.05  in MEDCAW INVESTMENTS LS 01 on December 20, 2024 and sell it today you would earn a total of  0.00  from holding MEDCAW INVESTMENTS LS 01 or generate 0.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	98.31%
Values	Daily Returns

Ares Management Corp  vs.  MEDCAW INVESTMENTS LS 01

Ares Management Corp

Risk-Adjusted Performance

Very Weak

Over the last 90 days Ares Management Corp has generated negative risk-adjusted returns adding no value to investors with long positions. Despite unsteady performance in the last few months, the Stock's basic indicators remain nearly stable which may send shares a bit higher in April 2025. The current disturbance may also be a sign of long-run up-swing for the company stockholders.

MEDCAW INVESTMENTS

Risk-Adjusted Performance

Very Weak

Over the last 90 days MEDCAW INVESTMENTS LS 01 has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable basic indicators, MEDCAW INVESTMENTS is not utilizing all of its potentials. The newest stock price disturbance, may contribute to mid-run losses for the stockholders.

Pair Trading with Ares Management and MEDCAW INVESTMENTS

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

The idea behind Ares Management Corp and MEDCAW INVESTMENTS LS 01 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 Portfolio File Import module to quickly import all of your third-party portfolios from your local drive in csv format.