Correlation Between AerSale Corp and Canada Goose

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

By analyzing existing cross correlation between AerSale Corp and Canada Goose Holdings, you can compare the effects of market volatilities on AerSale Corp and Canada Goose 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 Canada Goose. Check out your portfolio center. Please also check ongoing floating volatility patterns of AerSale Corp and Canada Goose.

Diversification Opportunities for AerSale Corp and Canada Goose

-0.75

Correlation Coefficient

AerSale Corp  Canada Goose

Pay attention - limited upside

The 3 months correlation between AerSale and Canada is -0.75. Overlapping area represents the amount of risk that can be diversified away by holding AerSale Corp and Canada Goose Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Canada Goose Holdings 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 Canada Goose. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Canada Goose Holdings has no effect on the direction of AerSale Corp i.e., AerSale Corp and Canada Goose go up and down completely randomly.

Pair Corralation between AerSale Corp and Canada Goose

Given the investment horizon of 90 days AerSale Corp is expected to under-perform the Canada Goose. In addition to that, AerSale Corp is 1.08 times more volatile than Canada Goose Holdings. It trades about -0.05 of its total potential returns per unit of risk. Canada Goose Holdings is currently generating about -0.04 per unit of volatility. If you would invest  2,183  in Canada Goose Holdings on October 13, 2024 and sell it today you would lose (1,185) from holding Canada Goose Holdings or give up 54.28% of portfolio value over 90 days.

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

AerSale Corp  vs.  Canada Goose Holdings

AerSale Corp

Risk-Adjusted Performance

13 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in AerSale Corp are ranked lower than 13 (%) 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.

Canada Goose Holdings

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Canada Goose Holdings has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest weak performance, the Stock's basic indicators remain stable and the newest uproar on Wall Street may also be a sign of mid-term gains for the firm private investors.

Pair Trading with AerSale Corp and Canada Goose

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

The idea behind AerSale Corp and Canada Goose Holdings 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 Balance Of Power module to check stock momentum by analyzing Balance Of Power indicator and other technical ratios.