Correlation Between AerSale Corp and Magnite
Can any of the company-specific risk be diversified away by investing in both AerSale Corp and Magnite 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 Magnite into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between AerSale Corp and Magnite, you can compare the effects of market volatilities on AerSale Corp and Magnite 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 Magnite. Check out your portfolio center. Please also check ongoing floating volatility patterns of AerSale Corp and Magnite.
Diversification Opportunities for AerSale Corp and Magnite
0.65 | Correlation Coefficient |
Poor diversification
The 3 months correlation between AerSale and Magnite is 0.65. Overlapping area represents the amount of risk that can be diversified away by holding AerSale Corp and Magnite in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Magnite 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 Magnite. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Magnite has no effect on the direction of AerSale Corp i.e., AerSale Corp and Magnite go up and down completely randomly.
Pair Corralation between AerSale Corp and Magnite
Given the investment horizon of 90 days AerSale Corp is expected to generate 0.35 times more return on investment than Magnite. However, AerSale Corp is 2.85 times less risky than Magnite. It trades about 0.1 of its potential returns per unit of risk. Magnite is currently generating about -0.04 per unit of risk. If you would invest 683.00 in AerSale Corp on November 29, 2024 and sell it today you would earn a total of 17.00 from holding AerSale Corp or generate 2.49% 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. Magnite
Performance |
| Timeline |
| AerSale Corp |
| Magnite |
AerSale Corp and Magnite Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with AerSale Corp and Magnite
The main advantage of trading using opposite AerSale Corp and Magnite positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if AerSale Corp position performs unexpectedly, Magnite 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 Magnite will offset losses from the drop in Magnite'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 |
| Magnite vs. Deluxe | Magnite vs. Clear Channel Outdoor | Magnite vs. Entravision Communications | Magnite vs. Criteo Sa |
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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.
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