Correlation Between Ares Capital and Corebridge Financial

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

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

Diversification Opportunities for Ares Capital and Corebridge Financial

0.42

Correlation Coefficient

Ares Capital  Corebridge Financial

Very weak diversification

The 3 months correlation between Ares and Corebridge is 0.42. Overlapping area represents the amount of risk that can be diversified away by holding Ares Capital and Corebridge Financial in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Corebridge Financial and Ares Capital 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 Capital are associated (or correlated) with Corebridge Financial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Corebridge Financial has no effect on the direction of Ares Capital i.e., Ares Capital and Corebridge Financial go up and down completely randomly.

Pair Corralation between Ares Capital and Corebridge Financial

Given the investment horizon of 90 days Ares Capital is expected to generate 0.63 times more return on investment than Corebridge Financial. However, Ares Capital is 1.58 times less risky than Corebridge Financial. It trades about -0.04 of its potential returns per unit of risk. Corebridge Financial is currently generating about -0.07 per unit of risk. If you would invest  2,187  in Ares Capital on September 10, 2025 and sell it today you would lose (85.00) from holding Ares Capital or give up 3.89% of portfolio value over 90 days.

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

Ares Capital  vs.  Corebridge Financial

Ares Capital

Risk-Adjusted Performance

Weakest

Over the last 90 days Ares Capital has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of rather sound fundamental indicators, Ares Capital is not utilizing all of its potentials. The current stock price tumult, may contribute to shorter-term losses for the shareholders.

Corebridge Financial

Risk-Adjusted Performance

Weakest

Over the last 90 days Corebridge Financial has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest fragile performance, the Stock's fundamental drivers remain stable and the current disturbance on Wall Street may also be a sign of long-run gains for the company stockholders.

Pair Trading with Ares Capital and Corebridge Financial

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

The idea behind Ares Capital and Corebridge Financial 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 Content Syndication module to quickly integrate customizable finance content to your own investment portal.