Correlation Between AerSale Corp and Palfinger
Can any of the company-specific risk be diversified away by investing in both AerSale Corp and Palfinger 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 Palfinger into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between AerSale Corp and Palfinger AG, you can compare the effects of market volatilities on AerSale Corp and Palfinger 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 Palfinger. Check out your portfolio center. Please also check ongoing floating volatility patterns of AerSale Corp and Palfinger.
Diversification Opportunities for AerSale Corp and Palfinger
-0.28 | Correlation Coefficient |
Very good diversification
The 3 months correlation between AerSale and Palfinger is -0.28. Overlapping area represents the amount of risk that can be diversified away by holding AerSale Corp and Palfinger AG in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Palfinger AG 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 Palfinger. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Palfinger AG has no effect on the direction of AerSale Corp i.e., AerSale Corp and Palfinger go up and down completely randomly.
Pair Corralation between AerSale Corp and Palfinger
Given the investment horizon of 90 days AerSale Corp is expected to under-perform the Palfinger. In addition to that, AerSale Corp is 2.05 times more volatile than Palfinger AG. It trades about -0.05 of its total potential returns per unit of risk. Palfinger AG is currently generating about 0.01 per unit of volatility. If you would invest 2,185 in Palfinger AG on September 2, 2024 and sell it today you would earn a total of 15.00 from holding Palfinger AG or generate 0.69% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 99.73% |
| Values | Daily Returns |
AerSale Corp vs. Palfinger AG
Performance |
| Timeline |
| AerSale Corp |
| Palfinger AG |
AerSale Corp and Palfinger Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with AerSale Corp and Palfinger
The main advantage of trading using opposite AerSale Corp and Palfinger positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if AerSale Corp position performs unexpectedly, Palfinger 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 Palfinger will offset losses from the drop in Palfinger'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 |
| Palfinger vs. Bill Com Holdings | Palfinger vs. Sapiens International | Palfinger vs. Western Acquisition Ventures | Palfinger vs. Rumble Inc |
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 Portfolio Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.
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