Correlation Between AerSale Corp and Shoe Carnival
Can any of the company-specific risk be diversified away by investing in both AerSale Corp and Shoe Carnival 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 Shoe Carnival into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between AerSale Corp and Shoe Carnival, you can compare the effects of market volatilities on AerSale Corp and Shoe Carnival 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 Shoe Carnival. Check out your portfolio center. Please also check ongoing floating volatility patterns of AerSale Corp and Shoe Carnival.
Diversification Opportunities for AerSale Corp and Shoe Carnival
-0.62 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between AerSale and Shoe is -0.62. Overlapping area represents the amount of risk that can be diversified away by holding AerSale Corp and Shoe Carnival in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Shoe Carnival 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 Shoe Carnival. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Shoe Carnival has no effect on the direction of AerSale Corp i.e., AerSale Corp and Shoe Carnival go up and down completely randomly.
Pair Corralation between AerSale Corp and Shoe Carnival
Given the investment horizon of 90 days AerSale Corp is expected to generate 1.02 times more return on investment than Shoe Carnival. However, AerSale Corp is 1.02 times more volatile than Shoe Carnival. It trades about 0.31 of its potential returns per unit of risk. Shoe Carnival is currently generating about 0.06 per unit of risk. If you would invest 542.00 in AerSale Corp on September 4, 2024 and sell it today you would earn a total of 101.00 from holding AerSale Corp or generate 18.63% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
AerSale Corp vs. Shoe Carnival
Performance |
| Timeline |
| AerSale Corp |
| Shoe Carnival |
AerSale Corp and Shoe Carnival Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with AerSale Corp and Shoe Carnival
The main advantage of trading using opposite AerSale Corp and Shoe Carnival positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if AerSale Corp position performs unexpectedly, Shoe Carnival 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 Shoe Carnival will offset losses from the drop in Shoe Carnival'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 |
| Shoe Carnival vs. Appian Corp | Shoe Carnival vs. Okta Inc | Shoe Carnival vs. MongoDB | Shoe Carnival vs. Twilio 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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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