Correlation Between Premium Catering and AerSale Corp
Can any of the company-specific risk be diversified away by investing in both Premium Catering 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 Premium Catering and AerSale Corp into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Premium Catering Limited and AerSale Corp, you can compare the effects of market volatilities on Premium Catering 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 Premium Catering with a short position of AerSale Corp. Check out your portfolio center. Please also check ongoing floating volatility patterns of Premium Catering and AerSale Corp.
Diversification Opportunities for Premium Catering and AerSale Corp
0.07 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Premium and AerSale is 0.07. Overlapping area represents the amount of risk that can be diversified away by holding Premium Catering Limited and AerSale Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AerSale Corp and Premium Catering 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 Premium Catering Limited 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 Premium Catering i.e., Premium Catering and AerSale Corp go up and down completely randomly.
Pair Corralation between Premium Catering and AerSale Corp
Allowing for the 90-day total investment horizon Premium Catering is expected to generate 79.73 times less return on investment than AerSale Corp. In addition to that, Premium Catering is 3.7 times more volatile than AerSale Corp. It trades about 0.0 of its total potential returns per unit of risk. AerSale Corp is currently generating about 0.23 per unit of volatility. 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 | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Premium Catering Limited vs. AerSale Corp
Performance |
| Timeline |
| Premium Catering |
| AerSale Corp |
Premium Catering and AerSale Corp Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Premium Catering and AerSale Corp
The main advantage of trading using opposite Premium Catering and AerSale Corp positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Premium Catering 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.| Premium Catering vs. Target Hospitality Corp | Premium Catering vs. Wilhelmina | Premium Catering vs. AZZ Incorporated | Premium Catering vs. Global Payments |
| 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 Aroon Oscillator module to analyze current equity momentum using Aroon Oscillator and other momentum ratios.
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