Correlation Between Ares Management and NAVI CRDITO

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

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

Diversification Opportunities for Ares Management and NAVI CRDITO

-0.34

Correlation Coefficient

Ares Management  NAVI CRDITO

Very good diversification

The 3 months correlation between Ares and NAVI is -0.34. Overlapping area represents the amount of risk that can be diversified away by holding Ares Management and NAVI CRDITO IMOBILIRIO in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on NAVI CRDITO IMOBILIRIO 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 NAVI CRDITO. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of NAVI CRDITO IMOBILIRIO has no effect on the direction of Ares Management i.e., Ares Management and NAVI CRDITO go up and down completely randomly.

Pair Corralation between Ares Management and NAVI CRDITO

Assuming the 90 days trading horizon Ares Management is expected to under-perform the NAVI CRDITO. But the stock apears to be less risky and, when comparing its historical volatility, Ares Management is 1.42 times less risky than NAVI CRDITO. The stock trades about -0.19 of its potential returns per unit of risk. The NAVI CRDITO IMOBILIRIO is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest  783.00  in NAVI CRDITO IMOBILIRIO on December 23, 2024 and sell it today you would earn a total of  57.00  from holding NAVI CRDITO IMOBILIRIO or generate 7.28% return on investment over 90 days.

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

Ares Management  vs.  NAVI CRDITO IMOBILIRIO

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.

NAVI CRDITO IMOBILIRIO

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in NAVI CRDITO IMOBILIRIO are ranked lower than 4 (%) of all funds and portfolios of funds over the last 90 days. Despite somewhat weak basic indicators, NAVI CRDITO may actually be approaching a critical reversion point that can send shares even higher in April 2025.

Pair Trading with Ares Management and NAVI CRDITO

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

The idea behind Ares Management and NAVI CRDITO IMOBILIRIO 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.