Correlation Between Aeroports and AerSale Corp
Can any of the company-specific risk be diversified away by investing in both Aeroports 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 Aeroports and AerSale Corp into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Aeroports de Paris and AerSale Corp, you can compare the effects of market volatilities on Aeroports 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 Aeroports with a short position of AerSale Corp. Check out your portfolio center. Please also check ongoing floating volatility patterns of Aeroports and AerSale Corp.
Diversification Opportunities for Aeroports and AerSale Corp
-0.72 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Aeroports and AerSale is -0.72. Overlapping area represents the amount of risk that can be diversified away by holding Aeroports de Paris and AerSale Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AerSale Corp and Aeroports 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 Aeroports de Paris 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 Aeroports i.e., Aeroports and AerSale Corp go up and down completely randomly.
Pair Corralation between Aeroports and AerSale Corp
Assuming the 90 days horizon Aeroports de Paris is expected to generate 1.16 times more return on investment than AerSale Corp. However, Aeroports is 1.16 times more volatile than AerSale Corp. It trades about 0.0 of its potential returns per unit of risk. AerSale Corp is currently generating about -0.04 per unit of risk. If you would invest 14,081 in Aeroports de Paris on August 25, 2024 and sell it today you would lose (2,706) from holding Aeroports de Paris or give up 19.22% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 64.79% |
| Values | Daily Returns |
Aeroports de Paris vs. AerSale Corp
Performance |
| Timeline |
| Aeroports de Paris |
| AerSale Corp |
Aeroports and AerSale Corp Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Aeroports and AerSale Corp
The main advantage of trading using opposite Aeroports and AerSale Corp positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Aeroports 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.| Aeroports vs. Aeroports de Paris | Aeroports vs. Aena SME SA | Aeroports vs. Auckland International Airport | Aeroports vs. Auckland International Airport |
| 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 Bollinger Bands module to use Bollinger Bands indicator to analyze target price for a given investing horizon.
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