Correlation Between AerSale Corp and Aena SME
Can any of the company-specific risk be diversified away by investing in both AerSale Corp and Aena SME 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 Aena SME into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between AerSale Corp and Aena SME SA, you can compare the effects of market volatilities on AerSale Corp and Aena SME 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 Aena SME. Check out your portfolio center. Please also check ongoing floating volatility patterns of AerSale Corp and Aena SME.
Diversification Opportunities for AerSale Corp and Aena SME
-0.03 | Correlation Coefficient |
Good diversification
The 3 months correlation between AerSale and Aena is -0.03. Overlapping area represents the amount of risk that can be diversified away by holding AerSale Corp and Aena SME SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Aena SME SA 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 Aena SME. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Aena SME SA has no effect on the direction of AerSale Corp i.e., AerSale Corp and Aena SME go up and down completely randomly.
Pair Corralation between AerSale Corp and Aena SME
Given the investment horizon of 90 days AerSale Corp is expected to generate 2.16 times more return on investment than Aena SME. However, AerSale Corp is 2.16 times more volatile than Aena SME SA. It trades about 0.41 of its potential returns per unit of risk. Aena SME SA is currently generating about -0.14 per unit of risk. 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 | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
AerSale Corp vs. Aena SME SA
Performance |
| Timeline |
| AerSale Corp |
| Aena SME SA |
AerSale Corp and Aena SME Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with AerSale Corp and Aena SME
The main advantage of trading using opposite AerSale Corp and Aena SME positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if AerSale Corp position performs unexpectedly, Aena SME 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 Aena SME will offset losses from the drop in Aena SME'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 |
| Aena SME vs. Aeroports de Paris | Aena SME vs. Auckland International Airport | Aena SME vs. Auckland International Airport | Aena SME vs. Corporacion America Airports |
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 Price Ceiling Movement module to calculate and plot Price Ceiling Movement for different equity instruments.
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