Correlation Between AerSale Corp and Acco Brands
Can any of the company-specific risk be diversified away by investing in both AerSale Corp and Acco Brands 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 AerSale Corp and Acco Brands into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between AerSale Corp and Acco Brands, you can compare the effects of market volatilities on AerSale Corp and Acco Brands 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 AerSale Corp with a short position of Acco Brands. Check out your portfolio center. Please also check ongoing floating volatility patterns of AerSale Corp and Acco Brands.
Diversification Opportunities for AerSale Corp and Acco Brands
0.68 | Correlation Coefficient |
Poor diversification
The 3 months correlation between AerSale and Acco is 0.68. Overlapping area represents the amount of risk that can be diversified away by holding AerSale Corp and Acco Brands in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Acco Brands and AerSale Corp 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 AerSale Corp are associated (or correlated) with Acco Brands. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Acco Brands has no effect on the direction of AerSale Corp i.e., AerSale Corp and Acco Brands go up and down completely randomly.
Pair Corralation between AerSale Corp and Acco Brands
Given the investment horizon of 90 days AerSale Corp is expected to generate 1.21 times more return on investment than Acco Brands. However, AerSale Corp is 1.21 times more volatile than Acco Brands. It trades about 0.29 of its potential returns per unit of risk. Acco Brands is currently generating about 0.14 per unit of risk. If you would invest 542.00 in AerSale Corp on September 3, 2024 and sell it today you would earn a total of 88.00 from holding AerSale Corp or generate 16.24% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
AerSale Corp vs. Acco Brands
Performance |
| Timeline |
| AerSale Corp |
| Acco Brands |
AerSale Corp and Acco Brands Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with AerSale Corp and Acco Brands
The main advantage of trading using opposite AerSale Corp and Acco Brands positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if AerSale Corp position performs unexpectedly, Acco Brands 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 Acco Brands will offset losses from the drop in Acco Brands' long position.| AerSale Corp vs. Grupo Aeroportuario del | AerSale Corp vs. Grupo Aeroportuario del | AerSale Corp vs. Corporacion America Airports | AerSale Corp vs. Aeroports de Paris |
| Acco Brands vs. HNI Corp | Acco Brands vs. Steelcase | Acco Brands vs. Ennis Inc | Acco Brands vs. Acacia Research |
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 Transaction History module to view history of all your transactions and understand their impact on performance.
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