Correlation Between AerSale Corp and Compania Cervecerias

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Can any of the company-specific risk be diversified away by investing in both AerSale Corp and Compania Cervecerias 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 Compania Cervecerias into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between AerSale Corp and Compania Cervecerias Unidas, you can compare the effects of market volatilities on AerSale Corp and Compania Cervecerias 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 Compania Cervecerias. Check out your portfolio center. Please also check ongoing floating volatility patterns of AerSale Corp and Compania Cervecerias.

Diversification Opportunities for AerSale Corp and Compania Cervecerias

AerSaleCompaniaDiversified AwayAerSaleCompaniaDiversified Away100%
0.81
  Correlation Coefficient

Very poor diversification

The 3 months correlation between AerSale and Compania is 0.81. Overlapping area represents the amount of risk that can be diversified away by holding AerSale Corp and Compania Cervecerias Unidas in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Compania Cervecerias 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 Compania Cervecerias. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Compania Cervecerias has no effect on the direction of AerSale Corp i.e., AerSale Corp and Compania Cervecerias go up and down completely randomly.

Pair Corralation between AerSale Corp and Compania Cervecerias

Given the investment horizon of 90 days AerSale Corp is expected to under-perform the Compania Cervecerias. In addition to that, AerSale Corp is 1.93 times more volatile than Compania Cervecerias Unidas. It trades about -0.04 of its total potential returns per unit of risk. Compania Cervecerias Unidas is currently generating about -0.02 per unit of volatility. If you would invest  1,573  in Compania Cervecerias Unidas on November 26, 2024 and sell it today you would lose (275.00) from holding Compania Cervecerias Unidas or give up 17.48% of portfolio value over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthStrong
Accuracy100.0%
ValuesDaily Returns

AerSale Corp  vs.  Compania Cervecerias Unidas

 Performance 
JavaScript chart by amCharts 3.21.15Dec2025Feb 5101520
JavaScript chart by amCharts 3.21.15ASLE CCU
       Timeline  
AerSale Corp 

Risk-Adjusted Performance

OK

 
Weak
 
Strong
Compared to the overall equity markets, risk-adjusted returns on investments in AerSale Corp are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. In spite of rather weak essential indicators, AerSale Corp may actually be approaching a critical reversion point that can send shares even higher in March 2025.
JavaScript chart by amCharts 3.21.15DecJanFebJanFeb66.26.46.66.877.2
Compania Cervecerias 

Risk-Adjusted Performance

Solid

 
Weak
 
Strong
Compared to the overall equity markets, risk-adjusted returns on investments in Compania Cervecerias Unidas are ranked lower than 18 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively unfluctuating fundamental indicators, Compania Cervecerias unveiled solid returns over the last few months and may actually be approaching a breakup point.
JavaScript chart by amCharts 3.21.15DecJanFebJanFeb1111.51212.513

AerSale Corp and Compania Cervecerias Volatility Contrast

   Predicted Return Density   
JavaScript chart by amCharts 3.21.15-5.52-4.13-2.75-1.360.02311.462.954.435.92 0.050.100.150.200.250.30
JavaScript chart by amCharts 3.21.15ASLE CCU
       Returns  

Pair Trading with AerSale Corp and Compania Cervecerias

The main advantage of trading using opposite AerSale Corp and Compania Cervecerias positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if AerSale Corp position performs unexpectedly, Compania Cervecerias 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 Compania Cervecerias will offset losses from the drop in Compania Cervecerias' long position.
The idea behind AerSale Corp and Compania Cervecerias Unidas 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.
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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 Idea Optimizer module to use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio .

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