Correlation Between AerSale Corp and Auckland International
Can any of the company-specific risk be diversified away by investing in both AerSale Corp and Auckland International 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 Auckland International into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between AerSale Corp and Auckland International Airport, you can compare the effects of market volatilities on AerSale Corp and Auckland International 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 Auckland International. Check out your portfolio center. Please also check ongoing floating volatility patterns of AerSale Corp and Auckland International.
Diversification Opportunities for AerSale Corp and Auckland International
-0.46 | Correlation Coefficient |
Very good diversification
The 3 months correlation between AerSale and Auckland is -0.46. Overlapping area represents the amount of risk that can be diversified away by holding AerSale Corp and Auckland International Airport in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Auckland International 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 Auckland International. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Auckland International has no effect on the direction of AerSale Corp i.e., AerSale Corp and Auckland International go up and down completely randomly.
Pair Corralation between AerSale Corp and Auckland International
Given the investment horizon of 90 days AerSale Corp is expected to under-perform the Auckland International. In addition to that, AerSale Corp is 1.24 times more volatile than Auckland International Airport. It trades about -0.04 of its total potential returns per unit of risk. Auckland International Airport is currently generating about -0.01 per unit of volatility. If you would invest 485.00 in Auckland International Airport on August 25, 2024 and sell it today you would lose (76.00) from holding Auckland International Airport or give up 15.67% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 69.22% |
| Values | Daily Returns |
AerSale Corp vs. Auckland International Airport
Performance |
| Timeline |
| AerSale Corp |
| Auckland International |
AerSale Corp and Auckland International Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with AerSale Corp and Auckland International
The main advantage of trading using opposite AerSale Corp and Auckland International positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if AerSale Corp position performs unexpectedly, Auckland International 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 Auckland International will offset losses from the drop in Auckland International's 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 |
| Auckland International vs. Auckland International Airport | Auckland International vs. Aena SME SA | Auckland International vs. Aena SME SA | Auckland International 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 Fundamentals Comparison module to compare fundamentals across multiple equities to find investing opportunities.
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