Correlation Between AerSale Corp and Century Therapeutics
Can any of the company-specific risk be diversified away by investing in both AerSale Corp and Century Therapeutics 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 Century Therapeutics into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between AerSale Corp and Century Therapeutics, you can compare the effects of market volatilities on AerSale Corp and Century Therapeutics 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 Century Therapeutics. Check out your portfolio center. Please also check ongoing floating volatility patterns of AerSale Corp and Century Therapeutics.
Diversification Opportunities for AerSale Corp and Century Therapeutics
-0.6 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between AerSale and Century is -0.6. Overlapping area represents the amount of risk that can be diversified away by holding AerSale Corp and Century Therapeutics in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Century Therapeutics 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 Century Therapeutics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Century Therapeutics has no effect on the direction of AerSale Corp i.e., AerSale Corp and Century Therapeutics go up and down completely randomly.
Pair Corralation between AerSale Corp and Century Therapeutics
Given the investment horizon of 90 days AerSale Corp is expected to generate 0.59 times more return on investment than Century Therapeutics. However, AerSale Corp is 1.7 times less risky than Century Therapeutics. It trades about -0.03 of its potential returns per unit of risk. Century Therapeutics is currently generating about -0.08 per unit of risk. If you would invest 1,052 in AerSale Corp on November 9, 2024 and sell it today you would lose (366.00) from holding AerSale Corp or give up 34.79% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
AerSale Corp vs. Century Therapeutics
Performance |
| Timeline |
| AerSale Corp |
| Century Therapeutics |
AerSale Corp and Century Therapeutics Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with AerSale Corp and Century Therapeutics
The main advantage of trading using opposite AerSale Corp and Century Therapeutics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if AerSale Corp position performs unexpectedly, Century Therapeutics 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 Century Therapeutics will offset losses from the drop in Century Therapeutics' 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 |
| Century Therapeutics vs. Edgewise Therapeutics | Century Therapeutics vs. C4 Therapeutics | Century Therapeutics vs. Mineralys Therapeutics, Common | Century Therapeutics vs. Cullinan Oncology LLC |
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 Technical Analysis module to check basic technical indicators and analysis based on most latest market data.
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