Correlation Between AerSale Corp and PGE Corp
Can any of the company-specific risk be diversified away by investing in both AerSale Corp and PGE Corp 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 PGE Corp into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between AerSale Corp and PGE Corp, you can compare the effects of market volatilities on AerSale Corp and PGE Corp 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 PGE Corp. Check out your portfolio center. Please also check ongoing floating volatility patterns of AerSale Corp and PGE Corp.
Diversification Opportunities for AerSale Corp and PGE Corp
0.8 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between AerSale and PGE is 0.8. Overlapping area represents the amount of risk that can be diversified away by holding AerSale Corp and PGE Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on PGE Corp 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 PGE Corp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of PGE Corp has no effect on the direction of AerSale Corp i.e., AerSale Corp and PGE Corp go up and down completely randomly.
Pair Corralation between AerSale Corp and PGE Corp
Given the investment horizon of 90 days AerSale Corp is expected to under-perform the PGE Corp. In addition to that, AerSale Corp is 2.78 times more volatile than PGE Corp. It trades about -0.03 of its total potential returns per unit of risk. PGE Corp is currently generating about 0.13 per unit of volatility. If you would invest 1,822 in PGE Corp on August 31, 2024 and sell it today you would earn a total of 341.00 from holding PGE Corp or generate 18.72% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 99.21% |
| Values | Daily Returns |
AerSale Corp vs. PGE Corp
Performance |
| Timeline |
| AerSale Corp |
| PGE Corp |
AerSale Corp and PGE Corp Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with AerSale Corp and PGE Corp
The main advantage of trading using opposite AerSale Corp and PGE Corp positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if AerSale Corp position performs unexpectedly, PGE Corp 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 PGE Corp will offset losses from the drop in PGE Corp's long position.| AerSale Corp vs. Grupo Aeroportuario del | AerSale Corp vs. Grupo Aeroportuario del | AerSale Corp vs. Corporacion America Airports | AerSale Corp vs. Aquagold International |
| PGE Corp vs. Consolidated Edison | PGE Corp vs. Southern Company | PGE Corp vs. Entergy | PGE Corp 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 Price Ceiling Movement module to calculate and plot Price Ceiling Movement for different equity instruments.
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