Correlation Between AerSale Corp and Steven Madden
Can any of the company-specific risk be diversified away by investing in both AerSale Corp and Steven Madden 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 Steven Madden into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between AerSale Corp and Steven Madden, you can compare the effects of market volatilities on AerSale Corp and Steven Madden 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 Steven Madden. Check out your portfolio center. Please also check ongoing floating volatility patterns of AerSale Corp and Steven Madden.
Diversification Opportunities for AerSale Corp and Steven Madden
-0.5 | Correlation Coefficient |
Very good diversification
The 3 months correlation between AerSale and Steven is -0.5. Overlapping area represents the amount of risk that can be diversified away by holding AerSale Corp and Steven Madden in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Steven Madden 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 Steven Madden. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Steven Madden has no effect on the direction of AerSale Corp i.e., AerSale Corp and Steven Madden go up and down completely randomly.
Pair Corralation between AerSale Corp and Steven Madden
Given the investment horizon of 90 days AerSale Corp is expected to under-perform the Steven Madden. In addition to that, AerSale Corp is 1.8 times more volatile than Steven Madden. It trades about -0.04 of its total potential returns per unit of risk. Steven Madden is currently generating about 0.05 per unit of volatility. If you would invest 3,196 in Steven Madden on September 4, 2024 and sell it today you would earn a total of 1,422 from holding Steven Madden or generate 44.49% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
AerSale Corp vs. Steven Madden
Performance |
| Timeline |
| AerSale Corp |
| Steven Madden |
AerSale Corp and Steven Madden Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with AerSale Corp and Steven Madden
The main advantage of trading using opposite AerSale Corp and Steven Madden positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if AerSale Corp position performs unexpectedly, Steven Madden 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 Steven Madden will offset losses from the drop in Steven Madden'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 |
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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 Bonds Directory module to find actively traded corporate debentures issued by US companies.
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