Correlation Between AerSale Corp and Alpha One
Can any of the company-specific risk be diversified away by investing in both AerSale Corp and Alpha One 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 Alpha One into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between AerSale Corp and Alpha One, you can compare the effects of market volatilities on AerSale Corp and Alpha One 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 Alpha One. Check out your portfolio center. Please also check ongoing floating volatility patterns of AerSale Corp and Alpha One.
Diversification Opportunities for AerSale Corp and Alpha One
-0.57 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between AerSale and Alpha is -0.57. Overlapping area represents the amount of risk that can be diversified away by holding AerSale Corp and Alpha One in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Alpha One 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 Alpha One. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Alpha One has no effect on the direction of AerSale Corp i.e., AerSale Corp and Alpha One go up and down completely randomly.
Pair Corralation between AerSale Corp and Alpha One
Given the investment horizon of 90 days AerSale Corp is expected to under-perform the Alpha One. But the stock apears to be less risky and, when comparing its historical volatility, AerSale Corp is 1.99 times less risky than Alpha One. The stock trades about -0.05 of its potential returns per unit of risk. The Alpha One is currently generating about 0.01 of returns per unit of risk over similar time horizon. If you would invest 251.00 in Alpha One on November 2, 2024 and sell it today you would lose (97.00) from holding Alpha One or give up 38.65% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 99.6% |
| Values | Daily Returns |
AerSale Corp vs. Alpha One
Performance |
| Timeline |
| AerSale Corp |
| Alpha One |
AerSale Corp and Alpha One Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with AerSale Corp and Alpha One
The main advantage of trading using opposite AerSale Corp and Alpha One positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if AerSale Corp position performs unexpectedly, Alpha One 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 Alpha One will offset losses from the drop in Alpha One'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 |
| Alpha One vs. U Haul Holding | Alpha One vs. Hertz Global Hldgs | Alpha One vs. Triton International Limited | Alpha One vs. Custom Truck One |
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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