Correlation Between Cornerstone Strategic and Ares Management

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

By analyzing existing cross correlation between Cornerstone Strategic Return and Ares Management LP, you can compare the effects of market volatilities on Cornerstone Strategic and Ares Management 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 Cornerstone Strategic with a short position of Ares Management. Check out your portfolio center. Please also check ongoing floating volatility patterns of Cornerstone Strategic and Ares Management.

Diversification Opportunities for Cornerstone Strategic and Ares Management

0.89

Correlation Coefficient

Cornerstone Strategic  Ares Management

Very poor diversification

The 3 months correlation between Cornerstone and Ares is 0.89. Overlapping area represents the amount of risk that can be diversified away by holding Cornerstone Strategic Return and Ares Management LP in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ares Management LP and Cornerstone Strategic 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 Cornerstone Strategic Return are associated (or correlated) with Ares Management. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ares Management LP has no effect on the direction of Cornerstone Strategic i.e., Cornerstone Strategic and Ares Management go up and down completely randomly.

Pair Corralation between Cornerstone Strategic and Ares Management

Considering the 90-day investment horizon Cornerstone Strategic Return is expected to generate 0.76 times more return on investment than Ares Management. However, Cornerstone Strategic Return is 1.32 times less risky than Ares Management. It trades about -0.09 of its potential returns per unit of risk. Ares Management LP is currently generating about -0.1 per unit of risk. If you would invest  831.00  in Cornerstone Strategic Return on December 26, 2024 and sell it today you would lose (84.00) from holding Cornerstone Strategic Return or give up 10.11% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Strong
Accuracy	98.36%
Values	Daily Returns

Cornerstone Strategic Return  vs.  Ares Management LP

Cornerstone Strategic

Risk-Adjusted Performance

Very Weak

Over the last 90 days Cornerstone Strategic Return has generated negative risk-adjusted returns adding no value to fund investors. Despite latest unfluctuating performance, the Fund's basic indicators remain stable and the current disturbance on Wall Street may also be a sign of long-run gains for the mutual fund stockholders.

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.

Pair Trading with Cornerstone Strategic and Ares Management

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

The idea behind Cornerstone Strategic Return and Ares Management LP 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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.