Correlation Between AerSale Corp and Brown Advisory

Can any of the company-specific risk be diversified away by investing in both AerSale Corp and Brown Advisory 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 AerSale Corp and Brown Advisory into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between AerSale Corp and Brown Advisory Growth, you can compare the effects of market volatilities on AerSale Corp and Brown Advisory 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 AerSale Corp with a short position of Brown Advisory. Check out your portfolio center. Please also check ongoing floating volatility patterns of AerSale Corp and Brown Advisory.

Diversification Opportunities for AerSale Corp and Brown Advisory

-0.72

Correlation Coefficient

AerSale Corp  Brown Advisory

Pay attention - limited upside

The 3 months correlation between AerSale and Brown is -0.72. Overlapping area represents the amount of risk that can be diversified away by holding AerSale Corp and Brown Advisory Growth in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Brown Advisory Growth and AerSale Corp 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 AerSale Corp are associated (or correlated) with Brown Advisory. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Brown Advisory Growth has no effect on the direction of AerSale Corp i.e., AerSale Corp and Brown Advisory go up and down completely randomly.

Pair Corralation between AerSale Corp and Brown Advisory

Given the investment horizon of 90 days AerSale Corp is expected to generate 2.23 times more return on investment than Brown Advisory. However, AerSale Corp is 2.23 times more volatile than Brown Advisory Growth. It trades about 0.21 of its potential returns per unit of risk. Brown Advisory Growth is currently generating about -0.1 per unit of risk. If you would invest  619.00  in AerSale Corp on December 25, 2024 and sell it today you would earn a total of  222.00  from holding AerSale Corp or generate 35.86% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Weak
Accuracy	100.0%
Values	Daily Returns

AerSale Corp  vs.  Brown Advisory Growth

AerSale Corp

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in AerSale Corp are ranked lower than 16 (%) 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.

Brown Advisory Growth

Risk-Adjusted Performance

Very Weak

Over the last 90 days Brown Advisory Growth has generated negative risk-adjusted returns adding no value to fund investors. In spite of latest weak performance, the Fund's basic indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the fund investors.

Pair Trading with AerSale Corp and Brown Advisory

The main advantage of trading using opposite AerSale Corp and Brown Advisory positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if AerSale Corp position performs unexpectedly, Brown Advisory 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 Brown Advisory will offset losses from the drop in Brown Advisory's long position.

The idea behind AerSale Corp and Brown Advisory Growth 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 Price Ceiling Movement module to calculate and plot Price Ceiling Movement for different equity instruments.