Correlation Between LANDSEA GREEN and Ares Management

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

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

Diversification Opportunities for LANDSEA GREEN and Ares Management

0.0

Correlation Coefficient

LANDSEA GREEN  Ares Management

Pay attention - limited upside

The 3 months correlation between LANDSEA and Ares is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding LANDSEA GREEN MANAGEMENT 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 LANDSEA GREEN 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 LANDSEA GREEN MANAGEMENT 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 LANDSEA GREEN i.e., LANDSEA GREEN and Ares Management go up and down completely randomly.

Pair Corralation between LANDSEA GREEN and Ares Management

Assuming the 90 days horizon LANDSEA GREEN MANAGEMENT is expected to generate 40.42 times more return on investment than Ares Management. However, LANDSEA GREEN is 40.42 times more volatile than Ares Management Corp. It trades about 0.07 of its potential returns per unit of risk. Ares Management Corp is currently generating about 0.11 per unit of risk. If you would invest  1.20  in LANDSEA GREEN MANAGEMENT on October 10, 2024 and sell it today you would lose (1.10) from holding LANDSEA GREEN MANAGEMENT or give up 91.67% of portfolio value over 90 days.

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

LANDSEA GREEN MANAGEMENT  vs.  Ares Management Corp

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.

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.

Pair Trading with LANDSEA GREEN and Ares Management

The main advantage of trading using opposite LANDSEA GREEN and Ares Management positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if LANDSEA GREEN 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.

The idea behind LANDSEA GREEN MANAGEMENT and Ares Management Corp 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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.