Correlation Between PT Bank and Ares Management
Can any of the company-specific risk be diversified away by investing in both PT Bank 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 PT Bank and Ares Management into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between PT Bank Mandiri and Ares Management Corp, you can compare the effects of market volatilities on PT Bank 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 PT Bank with a short position of Ares Management. Check out your portfolio center. Please also check ongoing floating volatility patterns of PT Bank and Ares Management.
Diversification Opportunities for PT Bank and Ares Management
0.77 | Correlation Coefficient |
Poor diversification
The 3 months correlation between PQ9 and Ares is 0.77. Overlapping area represents the amount of risk that can be diversified away by holding PT Bank Mandiri and Ares Management Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ares Management Corp and PT Bank 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 PT Bank Mandiri 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 Corp has no effect on the direction of PT Bank i.e., PT Bank and Ares Management go up and down completely randomly.
Pair Corralation between PT Bank and Ares Management
Assuming the 90 days horizon PT Bank Mandiri is expected to under-perform the Ares Management. In addition to that, PT Bank is 2.24 times more volatile than Ares Management Corp. It trades about -0.06 of its total potential returns per unit of risk. Ares Management Corp is currently generating about -0.12 per unit of volatility. If you would invest 17,285 in Ares Management Corp on December 27, 2024 and sell it today you would lose (3,123) from holding Ares Management Corp or give up 18.07% of portfolio value over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Significant |
Accuracy | 100.0% |
Values | Daily Returns |
PT Bank Mandiri vs. Ares Management Corp
Performance |
Timeline |
PT Bank Mandiri |
Ares Management Corp |
PT Bank and Ares Management Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with PT Bank and Ares Management
The main advantage of trading using opposite PT Bank and Ares Management positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if PT Bank 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.PT Bank vs. OPKO HEALTH | PT Bank vs. CVS Health | PT Bank vs. NIGHTINGALE HEALTH EO | PT Bank vs. Bausch Health Companies |
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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 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.
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