Correlation Between AerCap Holdings and AENA SME
Can any of the company-specific risk be diversified away by investing in both AerCap Holdings and AENA SME 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 AerCap Holdings and AENA SME into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between AerCap Holdings NV and AENA SME UNSPADR110, you can compare the effects of market volatilities on AerCap Holdings and AENA SME 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 AerCap Holdings with a short position of AENA SME. Check out your portfolio center. Please also check ongoing floating volatility patterns of AerCap Holdings and AENA SME.
Diversification Opportunities for AerCap Holdings and AENA SME
0.62 | Correlation Coefficient |
Poor diversification
The 3 months correlation between AerCap and AENA is 0.62. Overlapping area represents the amount of risk that can be diversified away by holding AerCap Holdings NV and AENA SME UNSPADR110 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AENA SME UNSPADR110 and AerCap Holdings 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 AerCap Holdings NV are associated (or correlated) with AENA SME. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of AENA SME UNSPADR110 has no effect on the direction of AerCap Holdings i.e., AerCap Holdings and AENA SME go up and down completely randomly.
Pair Corralation between AerCap Holdings and AENA SME
Assuming the 90 days horizon AerCap Holdings is expected to generate 1.13 times less return on investment than AENA SME. In addition to that, AerCap Holdings is 1.04 times more volatile than AENA SME UNSPADR110. It trades about 0.07 of its total potential returns per unit of risk. AENA SME UNSPADR110 is currently generating about 0.09 per unit of volatility. If you would invest 1,054 in AENA SME UNSPADR110 on September 12, 2024 and sell it today you would earn a total of 926.00 from holding AENA SME UNSPADR110 or generate 87.86% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
AerCap Holdings NV vs. AENA SME UNSPADR110
Performance |
| Timeline |
| AerCap Holdings NV |
| AENA SME UNSPADR110 |
AerCap Holdings and AENA SME Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with AerCap Holdings and AENA SME
The main advantage of trading using opposite AerCap Holdings and AENA SME positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if AerCap Holdings position performs unexpectedly, AENA SME 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 AENA SME will offset losses from the drop in AENA SME's long position.| AerCap Holdings vs. Aena SME SA | AerCap Holdings vs. Superior Plus Corp | AerCap Holdings vs. SIVERS SEMICONDUCTORS AB | AerCap Holdings vs. Norsk Hydro ASA |
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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 Equity Valuation module to check real value of public entities based on technical and fundamental data.
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