Correlation Between Ares Management and Cion Investment

Specify exactly 2 symbols:
Can any of the company-specific risk be diversified away by investing in both Ares Management and Cion Investment 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 Cion Investment into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Ares Management LP and Cion Investment Corp, you can compare the effects of market volatilities on Ares Management and Cion Investment 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 Cion Investment. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ares Management and Cion Investment.

Diversification Opportunities for Ares Management and Cion Investment

AresCionDiversified AwayAresCionDiversified Away100%
0.19
  Correlation Coefficient

Average diversification

The 3 months correlation between Ares and Cion is 0.19. Overlapping area represents the amount of risk that can be diversified away by holding Ares Management LP and Cion Investment Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cion Investment Corp 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 LP are associated (or correlated) with Cion Investment. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Cion Investment Corp has no effect on the direction of Ares Management i.e., Ares Management and Cion Investment go up and down completely randomly.

Pair Corralation between Ares Management and Cion Investment

Given the investment horizon of 90 days Ares Management LP is expected to generate 1.65 times more return on investment than Cion Investment. However, Ares Management is 1.65 times more volatile than Cion Investment Corp. It trades about 0.08 of its potential returns per unit of risk. Cion Investment Corp is currently generating about -0.08 per unit of risk. If you would invest  16,181  in Ares Management LP on October 15, 2024 and sell it today you would earn a total of  1,323  from holding Ares Management LP or generate 8.18% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthInsignificant
Accuracy100.0%
ValuesDaily Returns

Ares Management LP  vs.  Cion Investment Corp

 Performance 
JavaScript chart by amCharts 3.21.15OctNovDec -5051015
JavaScript chart by amCharts 3.21.15ARES CION
       Timeline  
Ares Management LP 

Risk-Adjusted Performance

6 of 100

 
Weak
 
Strong
Modest
Compared to the overall equity markets, risk-adjusted returns on investments in Ares Management LP are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively weak technical and fundamental indicators, Ares Management may actually be approaching a critical reversion point that can send shares even higher in February 2025.
JavaScript chart by amCharts 3.21.15NovDecJanDecJan160165170175180185
Cion Investment Corp 

Risk-Adjusted Performance

0 of 100

 
Weak
 
Strong
Very Weak
Over the last 90 days Cion Investment Corp has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of very healthy basic indicators, Cion Investment is not utilizing all of its potentials. The recent stock price disarray, may contribute to short-term losses for the investors.
JavaScript chart by amCharts 3.21.15NovDecJanDecJan1111.211.411.611.812

Ares Management and Cion Investment Volatility Contrast

   Predicted Return Density   
JavaScript chart by amCharts 3.21.15-5.84-4.37-2.91-1.440.01.483.014.546.077.59 0.050.100.150.200.250.300.35
JavaScript chart by amCharts 3.21.15ARES CION
       Returns  

Pair Trading with Ares Management and Cion Investment

The main advantage of trading using opposite Ares Management and Cion Investment positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ares Management position performs unexpectedly, Cion Investment 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 Cion Investment will offset losses from the drop in Cion Investment's long position.
The idea behind Ares Management LP and Cion Investment 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.
Check out your portfolio center.
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 ETFs module to find actively traded Exchange Traded Funds (ETF) from around the world.

Other Complementary Tools

Commodity Directory
Find actively traded commodities issued by global exchanges
Portfolio Rebalancing
Analyze risk-adjusted returns against different time horizons to find asset-allocation targets
Transaction History
View history of all your transactions and understand their impact on performance
Portfolio Suggestion
Get suggestions outside of your existing asset allocation including your own model portfolios
Premium Stories
Follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope