Correlation Between AerSale Corp and Iris Energy
Can any of the company-specific risk be diversified away by investing in both AerSale Corp and Iris 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 Iris 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 Iris Energy, you can compare the effects of market volatilities on AerSale Corp and Iris 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 Iris Energy. Check out your portfolio center. Please also check ongoing floating volatility patterns of AerSale Corp and Iris Energy.
Diversification Opportunities for AerSale Corp and Iris Energy
0.75 | Correlation Coefficient |
Poor diversification
The 3 months correlation between AerSale and Iris is 0.75. Overlapping area represents the amount of risk that can be diversified away by holding AerSale Corp and Iris Energy in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Iris 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 Iris Energy. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Iris Energy has no effect on the direction of AerSale Corp i.e., AerSale Corp and Iris Energy go up and down completely randomly.
Pair Corralation between AerSale Corp and Iris Energy
Given the investment horizon of 90 days AerSale Corp is expected to generate 2.65 times less return on investment than Iris Energy. But when comparing it to its historical volatility, AerSale Corp is 3.84 times less risky than Iris Energy. It trades about 0.33 of its potential returns per unit of risk. Iris Energy is currently generating about 0.23 of returns per unit of risk over similar time horizon. If you would invest 912.00 in Iris Energy on September 1, 2024 and sell it today you would earn a total of 439.00 from holding Iris Energy or generate 48.14% 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. Iris Energy
Performance |
| Timeline |
| AerSale Corp |
| Iris Energy |
AerSale Corp and Iris Energy Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with AerSale Corp and Iris Energy
The main advantage of trading using opposite AerSale Corp and Iris Energy positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if AerSale Corp position performs unexpectedly, Iris 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 Iris Energy will offset losses from the drop in Iris Energy's long position.| AerSale Corp vs. Corporacion America Airports | AerSale Corp vs. Aeroports de Paris | AerSale Corp vs. Japan Airport Terminal | AerSale Corp vs. Aena SME SA |
| Iris Energy vs. Pentair PLC | Iris Energy vs. AerSale Corp | Iris Energy vs. Hawkins | Iris Energy vs. Chemours Co |
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 Insider Screener module to find insiders across different sectors to evaluate their impact on performance.
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