Correlation Between Shoe Carnival and AerSale Corp
Can any of the company-specific risk be diversified away by investing in both Shoe Carnival 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 Shoe Carnival and AerSale Corp into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Shoe Carnival and AerSale Corp, you can compare the effects of market volatilities on Shoe Carnival 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 Shoe Carnival with a short position of AerSale Corp. Check out your portfolio center. Please also check ongoing floating volatility patterns of Shoe Carnival and AerSale Corp.
Diversification Opportunities for Shoe Carnival and AerSale Corp
-0.62 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Shoe and AerSale is -0.62. Overlapping area represents the amount of risk that can be diversified away by holding Shoe Carnival and AerSale Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AerSale Corp and Shoe Carnival 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 Shoe Carnival 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 Shoe Carnival i.e., Shoe Carnival and AerSale Corp go up and down completely randomly.
Pair Corralation between Shoe Carnival and AerSale Corp
Given the investment horizon of 90 days Shoe Carnival is expected to generate 5.04 times less return on investment than AerSale Corp. But when comparing it to its historical volatility, Shoe Carnival is 1.02 times less risky than AerSale Corp. It trades about 0.06 of its potential returns per unit of risk. AerSale Corp is currently generating about 0.31 of returns per unit of risk over similar time horizon. If you would invest 542.00 in AerSale Corp on September 4, 2024 and sell it today you would earn a total of 101.00 from holding AerSale Corp or generate 18.63% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Shoe Carnival vs. AerSale Corp
Performance |
| Timeline |
| Shoe Carnival |
| AerSale Corp |
Shoe Carnival and AerSale Corp Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Shoe Carnival and AerSale Corp
The main advantage of trading using opposite Shoe Carnival and AerSale Corp positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Shoe Carnival 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.| Shoe Carnival vs. Appian Corp | Shoe Carnival vs. Okta Inc | Shoe Carnival vs. MongoDB | Shoe Carnival vs. Twilio Inc |
| 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 Money Managers module to screen money managers from public funds and ETFs managed around the world.
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