Correlation Between Ares Management and Brookfield Real

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

Diversification Opportunities for Ares Management and Brookfield Real

0.18

Correlation Coefficient

Ares Management  Brookfield Real

Average diversification

The 3 months correlation between Ares and Brookfield is 0.18. Overlapping area represents the amount of risk that can be diversified away by holding Ares Management LP and Brookfield Real Assets in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Brookfield Real Assets 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 Brookfield Real. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Brookfield Real Assets has no effect on the direction of Ares Management i.e., Ares Management and Brookfield Real go up and down completely randomly.

Pair Corralation between Ares Management and Brookfield Real

Given the investment horizon of 90 days Ares Management LP is expected to under-perform the Brookfield Real. In addition to that, Ares Management is 6.53 times more volatile than Brookfield Real Assets. It trades about -0.09 of its total potential returns per unit of risk. Brookfield Real Assets is currently generating about 0.08 per unit of volatility. If you would invest  1,297  in Brookfield Real Assets on December 26, 2024 and sell it today you would earn a total of  23.00  from holding Brookfield Real Assets or generate 1.77% return on investment over 90 days.

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

Ares Management LP  vs.  Brookfield Real Assets

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.

Brookfield Real Assets

Risk-Adjusted Performance

Modest

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

Pair Trading with Ares Management and Brookfield Real

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

The idea behind Ares Management LP and Brookfield Real Assets 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 Stock Tickers module to use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites.