Correlation Between Allient and AerSale Corp
Can any of the company-specific risk be diversified away by investing in both Allient 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 Allient and AerSale Corp into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Allient and AerSale Corp, you can compare the effects of market volatilities on Allient 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 Allient with a short position of AerSale Corp. Check out your portfolio center. Please also check ongoing floating volatility patterns of Allient and AerSale Corp.
Diversification Opportunities for Allient and AerSale Corp
0.33 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Allient and AerSale is 0.33. Overlapping area represents the amount of risk that can be diversified away by holding Allient and AerSale Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AerSale Corp and Allient 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 Allient 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 Allient i.e., Allient and AerSale Corp go up and down completely randomly.
Pair Corralation between Allient and AerSale Corp
Given the investment horizon of 90 days Allient is expected to generate 1.08 times more return on investment than AerSale Corp. However, Allient is 1.08 times more volatile than AerSale Corp. It trades about 0.01 of its potential returns per unit of risk. AerSale Corp is currently generating about 0.0 per unit of risk. If you would invest 2,605 in Allient on November 28, 2024 and sell it today you would lose (37.00) from holding Allient or give up 1.42% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Allient vs. AerSale Corp
Performance |
| Timeline |
| Allient |
| AerSale Corp |
Allient and AerSale Corp Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Allient and AerSale Corp
The main advantage of trading using opposite Allient and AerSale Corp positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Allient 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.The idea behind Allient and AerSale Corp pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.| 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 File Import module to quickly import all of your third-party portfolios from your local drive in csv format.
Other Complementary Tools
| Price Transformation Use Price Transformation models to analyze the depth of different equity instruments across global markets | |
| Price Exposure Probability Analyze equity upside and downside potential for a given time horizon across multiple markets | |
| Portfolio Manager State of the art Portfolio Manager to monitor and improve performance of your invested capital | |
| Bonds Directory Find actively traded corporate debentures issued by US companies | |
| Stocks Directory Find actively traded stocks across global markets |