Correlation Between Ares Capital and DGAZ
Can any of the company-specific risk be diversified away by investing in both Ares Capital and DGAZ 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 DGAZ into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Ares Capital and DGAZ, you can compare the effects of market volatilities on Ares Capital and DGAZ 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 DGAZ. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ares Capital and DGAZ.
Diversification Opportunities for Ares Capital and DGAZ
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Ares and DGAZ is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Ares Capital and DGAZ in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on DGAZ 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 DGAZ. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of DGAZ has no effect on the direction of Ares Capital i.e., Ares Capital and DGAZ go up and down completely randomly.
Pair Corralation between Ares Capital and DGAZ
If you would invest 2,012 in Ares Capital on January 24, 2024 and sell it today you would earn a total of 54.00 from holding Ares Capital or generate 2.68% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 0.0% |
| Values | Daily Returns |
Ares Capital vs. DGAZ
Performance |
| Timeline |
| Ares Capital |
| DGAZ |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Ares Capital and DGAZ Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ares Capital and DGAZ
The main advantage of trading using opposite Ares Capital and DGAZ positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ares Capital position performs unexpectedly, DGAZ 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 DGAZ will offset losses from the drop in DGAZ's long position.| Ares Capital vs. Triplepoint Venture Growth | Ares Capital vs. Sixth Street Specialty | Ares Capital vs. Main Street Capital | Ares Capital vs. Capital Southwest |
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 Pattern Recognition module to use different Pattern Recognition models to time the market across multiple global exchanges.
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