Correlation Between AerSale Corp and United Parks
Can any of the company-specific risk be diversified away by investing in both AerSale Corp and United Parks 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 United Parks into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between AerSale Corp and United Parks Resorts, you can compare the effects of market volatilities on AerSale Corp and United Parks 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 United Parks. Check out your portfolio center. Please also check ongoing floating volatility patterns of AerSale Corp and United Parks.
Diversification Opportunities for AerSale Corp and United Parks
0.89 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between AerSale and United is 0.89. Overlapping area represents the amount of risk that can be diversified away by holding AerSale Corp and United Parks Resorts in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on United Parks Resorts 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 United Parks. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of United Parks Resorts has no effect on the direction of AerSale Corp i.e., AerSale Corp and United Parks go up and down completely randomly.
Pair Corralation between AerSale Corp and United Parks
Given the investment horizon of 90 days AerSale Corp is expected to generate 1.26 times more return on investment than United Parks. However, AerSale Corp is 1.26 times more volatile than United Parks Resorts. It trades about 0.13 of its potential returns per unit of risk. United Parks Resorts is currently generating about 0.06 per unit of risk. If you would invest 506.00 in AerSale Corp on September 24, 2024 and sell it today you would earn a total of 114.00 from holding AerSale Corp or generate 22.53% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Strong |
Accuracy | 100.0% |
Values | Daily Returns |
AerSale Corp vs. United Parks Resorts
Performance |
Timeline |
AerSale Corp |
United Parks Resorts |
AerSale Corp and United Parks Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with AerSale Corp and United Parks
The main advantage of trading using opposite AerSale Corp and United Parks positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if AerSale Corp position performs unexpectedly, United Parks 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 United Parks will offset losses from the drop in United Parks' long position.AerSale Corp vs. Grupo Aeroportuario del | ||
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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 Premium Stories module to follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope.
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