Correlation Between Hillenbrand and AerSale Corp

Specify exactly 2 symbols:
Can any of the company-specific risk be diversified away by investing in both Hillenbrand 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 Hillenbrand and AerSale Corp into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Hillenbrand and AerSale Corp, you can compare the effects of market volatilities on Hillenbrand 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 Hillenbrand with a short position of AerSale Corp. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hillenbrand and AerSale Corp.

Diversification Opportunities for Hillenbrand and AerSale Corp

0.53
  Correlation Coefficient

Very weak diversification

The 3 months correlation between Hillenbrand and AerSale is 0.53. Overlapping area represents the amount of risk that can be diversified away by holding Hillenbrand and AerSale Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AerSale Corp and Hillenbrand 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 Hillenbrand 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 Hillenbrand i.e., Hillenbrand and AerSale Corp go up and down completely randomly.

Pair Corralation between Hillenbrand and AerSale Corp

Allowing for the 90-day total investment horizon Hillenbrand is expected to generate 0.84 times more return on investment than AerSale Corp. However, Hillenbrand is 1.18 times less risky than AerSale Corp. It trades about 0.62 of its potential returns per unit of risk. AerSale Corp is currently generating about 0.23 per unit of risk. If you would invest  2,907  in Hillenbrand on October 20, 2024 and sell it today you would earn a total of  488.00  from holding Hillenbrand or generate 16.79% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthWeak
Accuracy100.0%
ValuesDaily Returns

Hillenbrand  vs.  AerSale Corp

 Performance 
       Timeline  
Hillenbrand 

Risk-Adjusted Performance

10 of 100

 
Weak
 
Strong
OK
Compared to the overall equity markets, risk-adjusted returns on investments in Hillenbrand are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. Despite fairly weak forward indicators, Hillenbrand demonstrated solid returns over the last few months and may actually be approaching a breakup point.
AerSale Corp 

Risk-Adjusted Performance

12 of 100

 
Weak
 
Strong
Good
Compared to the overall equity markets, risk-adjusted returns on investments in AerSale Corp are ranked lower than 12 (%) of all global equities and portfolios over the last 90 days. In spite of rather weak essential indicators, AerSale Corp exhibited solid returns over the last few months and may actually be approaching a breakup point.

Hillenbrand and AerSale Corp Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Hillenbrand and AerSale Corp

The main advantage of trading using opposite Hillenbrand and AerSale Corp positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hillenbrand 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.
The idea behind Hillenbrand and AerSale Corp pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.
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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.

Other Complementary Tools

Money Managers
Screen money managers from public funds and ETFs managed around the world
Price Ceiling Movement
Calculate and plot Price Ceiling Movement for different equity instruments
Technical Analysis
Check basic technical indicators and analysis based on most latest market data
Portfolio Suggestion
Get suggestions outside of your existing asset allocation including your own model portfolios
Global Correlations
Find global opportunities by holding instruments from different markets