Correlation Between Carlyle Secured and Ares Management
Can any of the company-specific risk be diversified away by investing in both Carlyle Secured 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 Carlyle Secured and Ares Management into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Carlyle Secured Lending and Ares Management LP, you can compare the effects of market volatilities on Carlyle Secured 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 Carlyle Secured with a short position of Ares Management. Check out your portfolio center. Please also check ongoing floating volatility patterns of Carlyle Secured and Ares Management.
Diversification Opportunities for Carlyle Secured and Ares Management
0.58 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Carlyle and Ares is 0.58. Overlapping area represents the amount of risk that can be diversified away by holding Carlyle Secured Lending 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 Carlyle Secured 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 Carlyle Secured Lending 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 Carlyle Secured i.e., Carlyle Secured and Ares Management go up and down completely randomly.
Pair Corralation between Carlyle Secured and Ares Management
Given the investment horizon of 90 days Carlyle Secured is expected to generate 4.82 times less return on investment than Ares Management. But when comparing it to its historical volatility, Carlyle Secured Lending is 1.83 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 0.24 of returns per unit of risk over similar time horizon. If you would invest 14,939 in Ares Management LP on July 18, 2024 and sell it today you would earn a total of 1,324 from holding Ares Management LP or generate 8.86% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Weak |
Accuracy | 100.0% |
Values | Daily Returns |
Carlyle Secured Lending vs. Ares Management LP
Performance |
Timeline |
Carlyle Secured Lending |
Ares Management LP |
Carlyle Secured and Ares Management Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Carlyle Secured and Ares Management
The main advantage of trading using opposite Carlyle Secured and Ares Management positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Carlyle Secured 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.Carlyle Secured vs. Top KingWin Ltd | Carlyle Secured vs. Mercurity Fintech Holding | Carlyle Secured vs. Zhong Yang Financial | Carlyle Secured vs. Applied Blockchain |
Ares Management vs. Top KingWin Ltd | Ares Management vs. Mercurity Fintech Holding | Ares Management vs. Zhong Yang Financial | Ares Management vs. Applied Blockchain |
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 Correlation Analysis module to reduce portfolio risk simply by holding instruments which are not perfectly correlated.
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