Correlation Between Supercom and AerSale Corp
Can any of the company-specific risk be diversified away by investing in both Supercom 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 Supercom and AerSale Corp into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Supercom and AerSale Corp, you can compare the effects of market volatilities on Supercom 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 Supercom with a short position of AerSale Corp. Check out your portfolio center. Please also check ongoing floating volatility patterns of Supercom and AerSale Corp.
Diversification Opportunities for Supercom and AerSale Corp
0.17 | Correlation Coefficient |
Average diversification
The 3 months correlation between Supercom and AerSale is 0.17. Overlapping area represents the amount of risk that can be diversified away by holding Supercom and AerSale Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AerSale Corp and Supercom 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 Supercom 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 Supercom i.e., Supercom and AerSale Corp go up and down completely randomly.
Pair Corralation between Supercom and AerSale Corp
Given the investment horizon of 90 days Supercom is expected to generate 3.85 times less return on investment than AerSale Corp. In addition to that, Supercom is 1.6 times more volatile than AerSale Corp. It trades about 0.04 of its total potential returns per unit of risk. AerSale Corp is currently generating about 0.26 per unit of volatility. If you would invest 540.00 in AerSale Corp on August 31, 2024 and sell it today you would earn a total of 85.00 from holding AerSale Corp or generate 15.74% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Supercom vs. AerSale Corp
Performance |
| Timeline |
| Supercom |
| AerSale Corp |
Supercom and AerSale Corp Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Supercom and AerSale Corp
The main advantage of trading using opposite Supercom and AerSale Corp positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Supercom 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.| Supercom vs. Zedcor Inc | Supercom vs. SSC Security Services | Supercom vs. Blue Line Protection | Supercom vs. Guardforce AI Co |
| AerSale Corp vs. Grupo Aeroportuario del | AerSale Corp vs. Grupo Aeroportuario del | AerSale Corp vs. Corporacion America Airports | AerSale Corp vs. Aquagold International |
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 Investing Opportunities module to build portfolios using our predefined set of ideas and optimize them against your investing preferences.
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