Correlation Between AerSale Corp and CenterPoint Energy
Can any of the company-specific risk be diversified away by investing in both AerSale Corp and CenterPoint Energy 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 CenterPoint Energy into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between AerSale Corp and CenterPoint Energy, you can compare the effects of market volatilities on AerSale Corp and CenterPoint Energy 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 CenterPoint Energy. Check out your portfolio center. Please also check ongoing floating volatility patterns of AerSale Corp and CenterPoint Energy.
Diversification Opportunities for AerSale Corp and CenterPoint Energy
0.7 | Correlation Coefficient |
Poor diversification
The 3 months correlation between AerSale and CenterPoint is 0.7. Overlapping area represents the amount of risk that can be diversified away by holding AerSale Corp and CenterPoint Energy in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CenterPoint Energy 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 CenterPoint Energy. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CenterPoint Energy has no effect on the direction of AerSale Corp i.e., AerSale Corp and CenterPoint Energy go up and down completely randomly.
Pair Corralation between AerSale Corp and CenterPoint Energy
Given the investment horizon of 90 days AerSale Corp is expected to generate 2.1 times more return on investment than CenterPoint Energy. However, AerSale Corp is 2.1 times more volatile than CenterPoint Energy. It trades about 0.3 of its potential returns per unit of risk. CenterPoint Energy is currently generating about 0.52 per unit of risk. If you would invest 537.00 in AerSale Corp on September 2, 2024 and sell it today you would earn a total of 93.00 from holding AerSale Corp or generate 17.32% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
AerSale Corp vs. CenterPoint Energy
Performance |
| Timeline |
| AerSale Corp |
| CenterPoint Energy |
AerSale Corp and CenterPoint Energy Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with AerSale Corp and CenterPoint Energy
The main advantage of trading using opposite AerSale Corp and CenterPoint Energy positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if AerSale Corp position performs unexpectedly, CenterPoint Energy 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 CenterPoint Energy will offset losses from the drop in CenterPoint Energy'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 |
| CenterPoint Energy vs. DTE Energy | CenterPoint Energy vs. Alliant Energy Corp | CenterPoint Energy vs. Ameren Corp | CenterPoint Energy vs. Pinnacle West Capital |
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 AI Portfolio Architect module to use AI to generate optimal portfolios and find profitable investment opportunities.
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