Correlation Between Ares Management and Vinci Corporate

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

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

Diversification Opportunities for Ares Management and Vinci Corporate

-0.52

Correlation Coefficient

Ares Management  Vinci Corporate

Excellent diversification

The 3 months correlation between Ares and Vinci is -0.52. Overlapping area represents the amount of risk that can be diversified away by holding Ares Management and Vinci Corporate Fundo in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Vinci Corporate Fundo 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 Vinci Corporate. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Vinci Corporate Fundo has no effect on the direction of Ares Management i.e., Ares Management and Vinci Corporate go up and down completely randomly.

Pair Corralation between Ares Management and Vinci Corporate

Assuming the 90 days trading horizon Ares Management is expected to under-perform the Vinci Corporate. In addition to that, Ares Management is 2.4 times more volatile than Vinci Corporate Fundo. It trades about -0.26 of its total potential returns per unit of risk. Vinci Corporate Fundo is currently generating about 0.52 per unit of volatility. If you would invest  454.00  in Vinci Corporate Fundo on December 23, 2024 and sell it today you would earn a total of  60.00  from holding Vinci Corporate Fundo or generate 13.22% return on investment over 90 days.

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

Ares Management  vs.  Vinci Corporate Fundo

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.

Vinci Corporate Fundo

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Vinci Corporate Fundo are ranked lower than 5 (%) of all funds and portfolios of funds over the last 90 days. Despite somewhat weak basic indicators, Vinci Corporate may actually be approaching a critical reversion point that can send shares even higher in April 2025.

Pair Trading with Ares Management and Vinci Corporate

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

The idea behind Ares Management and Vinci Corporate Fundo 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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.