Correlation Between 00928QAW1 and AerSale Corp

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Can any of the company-specific risk be diversified away by investing in both 00928QAW1 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 00928QAW1 and AerSale Corp into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between AYR 525 and AerSale Corp, you can compare the effects of market volatilities on 00928QAW1 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 00928QAW1 with a short position of AerSale Corp. Check out your portfolio center. Please also check ongoing floating volatility patterns of 00928QAW1 and AerSale Corp.

Diversification Opportunities for 00928QAW1 and AerSale Corp

-0.32
  Correlation Coefficient

Very good diversification

The 3 months correlation between 00928QAW1 and AerSale is -0.32. Overlapping area represents the amount of risk that can be diversified away by holding AYR 525 and AerSale Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AerSale Corp and 00928QAW1 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 AYR 525 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 00928QAW1 i.e., 00928QAW1 and AerSale Corp go up and down completely randomly.

Pair Corralation between 00928QAW1 and AerSale Corp

Assuming the 90 days trading horizon AYR 525 is expected to under-perform the AerSale Corp. In addition to that, 00928QAW1 is 1.66 times more volatile than AerSale Corp. It trades about -0.21 of its total potential returns per unit of risk. AerSale Corp is currently generating about 0.24 per unit of volatility. If you would invest  480.00  in AerSale Corp on September 3, 2024 and sell it today you would earn a total of  150.00  from holding AerSale Corp or generate 31.25% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Against 
StrengthInsignificant
Accuracy59.52%
ValuesDaily Returns

AYR 525  vs.  AerSale Corp

 Performance 
       Timeline  
00928QAW1 

Risk-Adjusted Performance

0 of 100

 
Weak
 
Strong
Very Weak
Over the last 90 days AYR 525 has generated negative risk-adjusted returns adding no value to investors with long positions. Despite weak performance in the last few months, the Bond's basic indicators remain somewhat strong which may send shares a bit higher in January 2025. The current disturbance may also be a sign of long term up-swing for AYR 525 investors.
AerSale Corp 

Risk-Adjusted Performance

12 of 100

 
Weak
 
Strong
Good
Compared to the overall equity markets, risk-adjusted returns on investments in AerSale Corp are ranked lower than 12 (%) of all global equities and portfolios over the last 90 days. In spite of rather weak essential indicators, AerSale Corp exhibited solid returns over the last few months and may actually be approaching a breakup point.

00928QAW1 and AerSale Corp Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with 00928QAW1 and AerSale Corp

The main advantage of trading using opposite 00928QAW1 and AerSale Corp positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if 00928QAW1 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.
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The idea behind AYR 525 and AerSale Corp pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.
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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 Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.

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