Correlation Between HAL Trust and Ares Management
Can any of the company-specific risk be diversified away by investing in both HAL Trust 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 HAL Trust and Ares Management into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between HAL Trust and Ares Management LP, you can compare the effects of market volatilities on HAL Trust 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 HAL Trust with a short position of Ares Management. Check out your portfolio center. Please also check ongoing floating volatility patterns of HAL Trust and Ares Management.
Diversification Opportunities for HAL Trust and Ares Management
0.32 | Correlation Coefficient |
Weak diversification
The 3 months correlation between HAL and Ares is 0.32. Overlapping area represents the amount of risk that can be diversified away by holding HAL Trust 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 HAL Trust 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 HAL Trust 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 HAL Trust i.e., HAL Trust and Ares Management go up and down completely randomly.
Pair Corralation between HAL Trust and Ares Management
Assuming the 90 days horizon HAL Trust is expected to under-perform the Ares Management. But the pink sheet apears to be less risky and, when comparing its historical volatility, HAL Trust is 1.42 times less risky than Ares Management. The pink sheet trades about -0.2 of its potential returns per unit of risk. The Ares Management LP is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest 13,239 in Ares Management LP on January 29, 2024 and sell it today you would earn a total of 123.00 from holding Ares Management LP or generate 0.93% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Very Weak |
Accuracy | 100.0% |
Values | Daily Returns |
HAL Trust vs. Ares Management LP
Performance |
Timeline |
HAL Trust |
Ares Management LP |
HAL Trust and Ares Management Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with HAL Trust and Ares Management
The main advantage of trading using opposite HAL Trust and Ares Management positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if HAL Trust 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.HAL Trust vs. Blackhawk Growth Corp | HAL Trust vs. Mount Logan Capital | HAL Trust vs. Guardian Capital Group | HAL Trust vs. Flow Capital Corp |
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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 Bond Analysis module to evaluate and analyze corporate bonds as a potential investment for your portfolios..
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