Correlation Between Barnes and AerSale Corp
Can any of the company-specific risk be diversified away by investing in both Barnes and AerSale 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 Barnes and AerSale Corp into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Barnes Group and AerSale Corp, you can compare the effects of market volatilities on Barnes and AerSale 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 Barnes with a short position of AerSale Corp. Check out your portfolio center. Please also check ongoing floating volatility patterns of Barnes and AerSale Corp.
Diversification Opportunities for Barnes and AerSale Corp
0.4 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Barnes and AerSale is 0.4. Overlapping area represents the amount of risk that can be diversified away by holding Barnes Group and AerSale Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AerSale Corp and Barnes 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 Barnes Group are associated (or correlated) with AerSale Corp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of AerSale Corp has no effect on the direction of Barnes i.e., Barnes and AerSale Corp go up and down completely randomly.
Pair Corralation between Barnes and AerSale Corp
Taking into account the 90-day investment horizon Barnes is expected to generate 17.45 times less return on investment than AerSale Corp. But when comparing it to its historical volatility, Barnes Group is 22.67 times less risky than AerSale Corp. It trades about 0.3 of its potential returns per unit of risk. AerSale Corp is currently generating about 0.23 of returns per unit of risk over similar time horizon. If you would invest 612.00 in AerSale Corp on October 20, 2024 and sell it today you would earn a total of 43.00 from holding AerSale Corp or generate 7.03% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 95.0% |
| Values | Daily Returns |
Barnes Group vs. AerSale Corp
Performance |
| Timeline |
| Barnes Group |
| AerSale Corp |
Barnes and AerSale Corp Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Barnes and AerSale Corp
The main advantage of trading using opposite Barnes and AerSale Corp positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Barnes position performs unexpectedly, AerSale 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 AerSale Corp will offset losses from the drop in AerSale Corp's long position.| Barnes vs. Helios Technologies | Barnes vs. Enpro Industries | Barnes vs. Omega Flex | Barnes vs. Luxfer Holdings PLC |
| AerSale Corp vs. Grupo Aeroportuario del | AerSale Corp vs. Grupo Aeroportuario del | AerSale Corp vs. Corporacion America Airports | AerSale Corp vs. Aeroports de Paris |
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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.
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