Correlation Between Emerson Radio and AerSale Corp
Can any of the company-specific risk be diversified away by investing in both Emerson Radio 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 Emerson Radio and AerSale Corp into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Emerson Radio and AerSale Corp, you can compare the effects of market volatilities on Emerson Radio 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 Emerson Radio with a short position of AerSale Corp. Check out your portfolio center. Please also check ongoing floating volatility patterns of Emerson Radio and AerSale Corp.
Diversification Opportunities for Emerson Radio and AerSale Corp
-0.42 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Emerson and AerSale is -0.42. Overlapping area represents the amount of risk that can be diversified away by holding Emerson Radio and AerSale Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AerSale Corp and Emerson Radio 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 Emerson Radio 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 Emerson Radio i.e., Emerson Radio and AerSale Corp go up and down completely randomly.
Pair Corralation between Emerson Radio and AerSale Corp
Considering the 90-day investment horizon Emerson Radio is expected to under-perform the AerSale Corp. In addition to that, Emerson Radio is 1.21 times more volatile than AerSale Corp. It trades about -0.27 of its total potential returns per unit of risk. AerSale Corp is currently generating about 0.3 per unit of volatility. If you would invest 537.00 in AerSale Corp on September 2, 2024 and sell it today you would earn a total of 93.00 from holding AerSale Corp or generate 17.32% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Emerson Radio vs. AerSale Corp
Performance |
| Timeline |
| Emerson Radio |
| AerSale Corp |
Emerson Radio and AerSale Corp Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Emerson Radio and AerSale Corp
The main advantage of trading using opposite Emerson Radio and AerSale Corp positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Emerson Radio 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.| Emerson Radio vs. VOXX International | Emerson Radio vs. LG Display Co | Emerson Radio vs. Vizio Holding Corp | Emerson Radio vs. Turtle Beach Corp |
| 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 CEOs Directory module to screen CEOs from public companies around the world.
Other Complementary Tools
| Risk-Return Analysis View associations between returns expected from investment and the risk you assume | |
| Portfolio Volatility Check portfolio volatility and analyze historical return density to properly model market risk | |
| Investing Opportunities Build portfolios using our predefined set of ideas and optimize them against your investing preferences | |
| Equity Forecasting Use basic forecasting models to generate price predictions and determine price momentum | |
| Equity Search Search for actively traded equities including funds and ETFs from over 30 global markets |