Correlation Between AerSale Corp and Citi Trends
Can any of the company-specific risk be diversified away by investing in both AerSale Corp and Citi Trends 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 Citi Trends into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between AerSale Corp and Citi Trends, you can compare the effects of market volatilities on AerSale Corp and Citi Trends 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 Citi Trends. Check out your portfolio center. Please also check ongoing floating volatility patterns of AerSale Corp and Citi Trends.
Diversification Opportunities for AerSale Corp and Citi Trends
0.4 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between AerSale and Citi is 0.4. Overlapping area represents the amount of risk that can be diversified away by holding AerSale Corp and Citi Trends in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Citi Trends 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 Citi Trends. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Citi Trends has no effect on the direction of AerSale Corp i.e., AerSale Corp and Citi Trends go up and down completely randomly.
Pair Corralation between AerSale Corp and Citi Trends
Given the investment horizon of 90 days AerSale Corp is expected to generate 2.13 times less return on investment than Citi Trends. But when comparing it to its historical volatility, AerSale Corp is 1.19 times less risky than Citi Trends. It trades about 0.12 of its potential returns per unit of risk. Citi Trends is currently generating about 0.22 of returns per unit of risk over similar time horizon. If you would invest 1,587 in Citi Trends on September 12, 2024 and sell it today you would earn a total of 912.00 from holding Citi Trends or generate 57.47% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
AerSale Corp vs. Citi Trends
Performance |
| Timeline |
| AerSale Corp |
| Citi Trends |
AerSale Corp and Citi Trends Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with AerSale Corp and Citi Trends
The main advantage of trading using opposite AerSale Corp and Citi Trends positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if AerSale Corp position performs unexpectedly, Citi Trends 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 Citi Trends will offset losses from the drop in Citi Trends' 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 |
| Citi Trends vs. Foot Locker | Citi Trends vs. Lands End | Citi Trends vs. Duluth Holdings | Citi Trends vs. Destination XL Group |
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 Money Flow Index module to determine momentum by analyzing Money Flow Index and other technical indicators.
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