Correlation Between Sea and AerSale Corp
Can any of the company-specific risk be diversified away by investing in both Sea 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 Sea and AerSale Corp into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Sea and AerSale Corp, you can compare the effects of market volatilities on Sea 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 Sea with a short position of AerSale Corp. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sea and AerSale Corp.
Diversification Opportunities for Sea and AerSale Corp
0.61 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Sea and AerSale is 0.61. Overlapping area represents the amount of risk that can be diversified away by holding Sea and AerSale Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AerSale Corp and Sea 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 Sea 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 Sea i.e., Sea and AerSale Corp go up and down completely randomly.
Pair Corralation between Sea and AerSale Corp
Allowing for the 90-day total investment horizon Sea is expected to generate 1.1 times more return on investment than AerSale Corp. However, Sea is 1.1 times more volatile than AerSale Corp. It trades about 0.06 of its potential returns per unit of risk. AerSale Corp is currently generating about -0.04 per unit of risk. If you would invest 5,810 in Sea on August 28, 2024 and sell it today you would earn a total of 5,590 from holding Sea or generate 96.21% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Sea vs. AerSale Corp
Performance |
| Timeline |
| Sea |
| AerSale Corp |
Sea and AerSale Corp Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sea and AerSale Corp
The main advantage of trading using opposite Sea and AerSale Corp positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sea 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.| Sea vs. Atari SA | Sea vs. Victory Square Technologies | Sea vs. Motorsport Gaming Us | Sea vs. Alpha Esports Tech |
| 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 Portfolio Center module to all portfolio management and optimization tools to improve performance of your portfolios.
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