Correlation Between Ares Management and Julius Bär

Can any of the company-specific risk be diversified away by investing in both Ares Management and Julius Bär 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 Julius Bär 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 Julius Br Gruppe, you can compare the effects of market volatilities on Ares Management and Julius Bär 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 Julius Bär. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ares Management and Julius Bär.

Diversification Opportunities for Ares Management and Julius Bär

-0.48

Correlation Coefficient

Ares Management  Julius Bär

Very good diversification

The 3 months correlation between Ares and Julius is -0.48. Overlapping area represents the amount of risk that can be diversified away by holding Ares Management LP and Julius Br Gruppe in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Julius Br Gruppe 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 Julius Bär. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Julius Br Gruppe has no effect on the direction of Ares Management i.e., Ares Management and Julius Bär go up and down completely randomly.

Pair Corralation between Ares Management and Julius Bär

Given the investment horizon of 90 days Ares Management LP is expected to under-perform the Julius Bär. In addition to that, Ares Management is 1.04 times more volatile than Julius Br Gruppe. It trades about -0.12 of its total potential returns per unit of risk. Julius Br Gruppe is currently generating about 0.14 per unit of volatility. If you would invest  6,322  in Julius Br Gruppe on December 28, 2024 and sell it today you would earn a total of  1,156  from holding Julius Br Gruppe or generate 18.29% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	95.08%
Values	Daily Returns

Ares Management LP  vs.  Julius Br Gruppe

Ares Management LP

Risk-Adjusted Performance

Very Weak

Over the last 90 days Ares Management LP has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of weak performance in the last few months, the Stock's technical and fundamental indicators remain comparatively stable which may send shares a bit higher in April 2025. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.

Julius Br Gruppe

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Julius Br Gruppe are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. Despite nearly weak basic indicators, Julius Bär reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Ares Management and Julius Bär

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

The idea behind Ares Management LP and Julius Br Gruppe 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 Price Transformation module to use Price Transformation models to analyze the depth of different equity instruments across global markets.