Correlation Between Acco Brands and AerSale Corp
Can any of the company-specific risk be diversified away by investing in both Acco Brands and AerSale Corp 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 Acco Brands and AerSale Corp into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Acco Brands and AerSale Corp, you can compare the effects of market volatilities on Acco Brands and AerSale Corp 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 Acco Brands with a short position of AerSale Corp. Check out your portfolio center. Please also check ongoing floating volatility patterns of Acco Brands and AerSale Corp.
Diversification Opportunities for Acco Brands and AerSale Corp
0.68 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Acco and AerSale is 0.68. Overlapping area represents the amount of risk that can be diversified away by holding Acco Brands and AerSale Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AerSale Corp and Acco Brands 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 Acco Brands are associated (or correlated) with AerSale Corp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of AerSale Corp has no effect on the direction of Acco Brands i.e., Acco Brands and AerSale Corp go up and down completely randomly.
Pair Corralation between Acco Brands and AerSale Corp
Given the investment horizon of 90 days Acco Brands is expected to generate 0.72 times more return on investment than AerSale Corp. However, Acco Brands is 1.4 times less risky than AerSale Corp. It trades about 0.02 of its potential returns per unit of risk. AerSale Corp is currently generating about -0.04 per unit of risk. If you would invest 500.00 in Acco Brands on September 3, 2024 and sell it today you would earn a total of 82.00 from holding Acco Brands or generate 16.4% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Acco Brands vs. AerSale Corp
Performance |
| Timeline |
| Acco Brands |
| AerSale Corp |
Acco Brands and AerSale Corp Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Acco Brands and AerSale Corp
The main advantage of trading using opposite Acco Brands and AerSale Corp positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Acco Brands position performs unexpectedly, AerSale Corp 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 AerSale Corp will offset losses from the drop in AerSale Corp's long position.| Acco Brands vs. HNI Corp | Acco Brands vs. Steelcase | Acco Brands vs. Ennis Inc | Acco Brands vs. Acacia Research |
| AerSale Corp vs. Grupo Aeroportuario del | AerSale Corp vs. Grupo Aeroportuario del | AerSale Corp vs. Corporacion America Airports | AerSale Corp vs. Aeroports de Paris |
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 Idea Optimizer module to use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio .
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