Correlation Between AerSale Corp and Chorus Aviation
Can any of the company-specific risk be diversified away by investing in both AerSale Corp and Chorus Aviation 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 Chorus Aviation into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between AerSale Corp and Chorus Aviation, you can compare the effects of market volatilities on AerSale Corp and Chorus Aviation 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 Chorus Aviation. Check out your portfolio center. Please also check ongoing floating volatility patterns of AerSale Corp and Chorus Aviation.
Diversification Opportunities for AerSale Corp and Chorus Aviation
0.17 | Correlation Coefficient |
Average diversification
The 3 months correlation between AerSale and Chorus is 0.17. Overlapping area represents the amount of risk that can be diversified away by holding AerSale Corp and Chorus Aviation in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Chorus Aviation 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 Chorus Aviation. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Chorus Aviation has no effect on the direction of AerSale Corp i.e., AerSale Corp and Chorus Aviation go up and down completely randomly.
Pair Corralation between AerSale Corp and Chorus Aviation
Given the investment horizon of 90 days AerSale Corp is expected to generate 267.37 times less return on investment than Chorus Aviation. But when comparing it to its historical volatility, AerSale Corp is 100.73 times less risky than Chorus Aviation. It trades about 0.07 of its potential returns per unit of risk. Chorus Aviation is currently generating about 0.18 of returns per unit of risk over similar time horizon. If you would invest 1,417 in Chorus Aviation on November 27, 2024 and sell it today you would lose (49.00) from holding Chorus Aviation or give up 3.46% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 95.24% |
| Values | Daily Returns |
AerSale Corp vs. Chorus Aviation
Performance |
| Timeline |
| AerSale Corp |
| Chorus Aviation |
AerSale Corp and Chorus Aviation Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with AerSale Corp and Chorus Aviation
The main advantage of trading using opposite AerSale Corp and Chorus Aviation positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if AerSale Corp position performs unexpectedly, Chorus Aviation 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 Chorus Aviation will offset losses from the drop in Chorus Aviation'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 |
| Chorus Aviation vs. Joby Aviation | Chorus Aviation vs. Wheels Up Experience | Chorus Aviation vs. AerSale Corp | Chorus Aviation vs. Grupo Aeroportuario del |
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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