Correlation Between Ares Management and BlackRock
Can any of the company-specific risk be diversified away by investing in both Ares Management and BlackRock 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 BlackRock into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Ares Management Corp and BlackRock, you can compare the effects of market volatilities on Ares Management and BlackRock 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 BlackRock. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ares Management and BlackRock.
Diversification Opportunities for Ares Management and BlackRock
0.9 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Ares and BlackRock is 0.9. Overlapping area represents the amount of risk that can be diversified away by holding Ares Management Corp and BlackRock in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BlackRock 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 Corp are associated (or correlated) with BlackRock. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of BlackRock has no effect on the direction of Ares Management i.e., Ares Management and BlackRock go up and down completely randomly.
Pair Corralation between Ares Management and BlackRock
Assuming the 90 days horizon Ares Management Corp is expected to generate 2.41 times more return on investment than BlackRock. However, Ares Management is 2.41 times more volatile than BlackRock. It trades about -0.05 of its potential returns per unit of risk. BlackRock is currently generating about -0.36 per unit of risk. If you would invest 16,763 in Ares Management Corp on September 24, 2024 and sell it today you would lose (367.00) from holding Ares Management Corp or give up 2.19% of portfolio value over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Very Strong |
Accuracy | 33.33% |
Values | Daily Returns |
Ares Management Corp vs. BlackRock
Performance |
Timeline |
Ares Management Corp |
BlackRock |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Solid
Ares Management and BlackRock Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Ares Management and BlackRock
The main advantage of trading using opposite Ares Management and BlackRock positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ares Management position performs unexpectedly, BlackRock 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 BlackRock will offset losses from the drop in BlackRock's long position.Ares Management vs. Ubisoft Entertainment SA | Ares Management vs. Tencent Music Entertainment | Ares Management vs. GigaMedia | Ares Management vs. Sabra Health Care |
BlackRock vs. Blackstone Group | BlackRock vs. The Bank of | BlackRock vs. Ameriprise Financial | BlackRock vs. State Street |
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 Efficient Frontier module to plot and analyze your portfolio and positions against risk-return landscape of the market..
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