Correlation Between Ares Management and CSHG Recebiveis

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

By analyzing existing cross correlation between Ares Management and CSHG Recebiveis Imobiliarios, you can compare the effects of market volatilities on Ares Management and CSHG Recebiveis 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 CSHG Recebiveis. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ares Management and CSHG Recebiveis.

Diversification Opportunities for Ares Management and CSHG Recebiveis

-0.71

Correlation Coefficient

Ares Management  CSHG Recebiveis

Pay attention - limited upside

The 3 months correlation between Ares and CSHG is -0.71. Overlapping area represents the amount of risk that can be diversified away by holding Ares Management and CSHG Recebiveis Imobiliarios in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CSHG Recebiveis Imob 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 are associated (or correlated) with CSHG Recebiveis. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CSHG Recebiveis Imob has no effect on the direction of Ares Management i.e., Ares Management and CSHG Recebiveis go up and down completely randomly.

Pair Corralation between Ares Management and CSHG Recebiveis

Assuming the 90 days trading horizon Ares Management is expected to under-perform the CSHG Recebiveis. In addition to that, Ares Management is 2.01 times more volatile than CSHG Recebiveis Imobiliarios. It trades about -0.19 of its total potential returns per unit of risk. CSHG Recebiveis Imobiliarios is currently generating about 0.08 per unit of volatility. If you would invest  9,028  in CSHG Recebiveis Imobiliarios on December 22, 2024 and sell it today you would earn a total of  446.00  from holding CSHG Recebiveis Imobiliarios or generate 4.94% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Weak
Accuracy	100.0%
Values	Daily Returns

Ares Management  vs.  CSHG Recebiveis Imobiliarios

Ares Management

Risk-Adjusted Performance

Very Weak

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

CSHG Recebiveis Imob

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in CSHG Recebiveis Imobiliarios are ranked lower than 6 (%) of all funds and portfolios of funds over the last 90 days. Despite somewhat strong fundamental indicators, CSHG Recebiveis is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Ares Management and CSHG Recebiveis

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

The idea behind Ares Management and CSHG Recebiveis Imobiliarios 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 Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.