Correlation Between Auckland International and AerSale Corp
Can any of the company-specific risk be diversified away by investing in both Auckland International 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 Auckland International and AerSale Corp into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Auckland International Airport and AerSale Corp, you can compare the effects of market volatilities on Auckland International 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 Auckland International with a short position of AerSale Corp. Check out your portfolio center. Please also check ongoing floating volatility patterns of Auckland International and AerSale Corp.
Diversification Opportunities for Auckland International and AerSale Corp
-0.46 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Auckland and AerSale is -0.46. Overlapping area represents the amount of risk that can be diversified away by holding Auckland International Airport and AerSale Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AerSale Corp and Auckland International 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 Auckland International Airport 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 Auckland International i.e., Auckland International and AerSale Corp go up and down completely randomly.
Pair Corralation between Auckland International and AerSale Corp
Assuming the 90 days horizon Auckland International Airport is expected to under-perform the AerSale Corp. In addition to that, Auckland International is 1.75 times more volatile than AerSale Corp. It trades about -0.07 of its total potential returns per unit of risk. AerSale Corp is currently generating about 0.4 per unit of volatility. If you would invest 516.00 in AerSale Corp on August 25, 2024 and sell it today you would earn a total of 141.00 from holding AerSale Corp or generate 27.33% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 95.65% |
| Values | Daily Returns |
Auckland International Airport vs. AerSale Corp
Performance |
| Timeline |
| Auckland International |
| AerSale Corp |
Auckland International and AerSale Corp Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Auckland International and AerSale Corp
The main advantage of trading using opposite Auckland International and AerSale Corp positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Auckland International 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.| Auckland International vs. Auckland International Airport | Auckland International vs. Aena SME SA | Auckland International vs. Aena SME SA | Auckland International vs. Aeroports de Paris |
| 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 Portfolio Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.
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