Correlation Between Allianzgi Equity and Ares Management

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

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

Diversification Opportunities for Allianzgi Equity and Ares Management

0.95

Correlation Coefficient

Allianzgi Equity  Ares Management

Almost no diversification

The 3 months correlation between Allianzgi and Ares is 0.95. Overlapping area represents the amount of risk that can be diversified away by holding Allianzgi Equity Convertible 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 Allianzgi Equity 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 Allianzgi Equity Convertible 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 Allianzgi Equity i.e., Allianzgi Equity and Ares Management go up and down completely randomly.

Pair Corralation between Allianzgi Equity and Ares Management

Considering the 90-day investment horizon Allianzgi Equity Convertible is expected to generate 0.48 times more return on investment than Ares Management. However, Allianzgi Equity Convertible is 2.1 times less risky than Ares Management. It trades about -0.06 of its potential returns per unit of risk. Ares Management LP is currently generating about -0.09 per unit of risk. If you would invest  2,397  in Allianzgi Equity Convertible on December 26, 2024 and sell it today you would lose (114.00) from holding Allianzgi Equity Convertible or give up 4.76% of portfolio value over 90 days.

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

Allianzgi Equity Convertible  vs.  Ares Management LP

Allianzgi Equity Con

Risk-Adjusted Performance

Very Weak

Over the last 90 days Allianzgi Equity Convertible has generated negative risk-adjusted returns adding no value to fund investors. In spite of rather sound forward indicators, Allianzgi Equity is not utilizing all of its potentials. The current stock price tumult, may contribute to shorter-term losses for the shareholders.

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 Allianzgi Equity and Ares Management

The main advantage of trading using opposite Allianzgi Equity and Ares Management positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Allianzgi Equity 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 Allianzgi Equity Convertible 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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.