Correlation Between Ryder System and AerSale Corp

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

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

Diversification Opportunities for Ryder System and AerSale Corp

-0.7

Correlation Coefficient

Ryder System  AerSale Corp

Excellent diversification

The 3 months correlation between Ryder and AerSale is -0.7. Overlapping area represents the amount of risk that can be diversified away by holding Ryder System and AerSale Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AerSale Corp and Ryder System 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 Ryder System 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 Ryder System i.e., Ryder System and AerSale Corp go up and down completely randomly.

Pair Corralation between Ryder System and AerSale Corp

Taking into account the 90-day investment horizon Ryder System is expected to under-perform the AerSale Corp. But the stock apears to be less risky and, when comparing its historical volatility, Ryder System is 1.42 times less risky than AerSale Corp. The stock trades about -0.07 of its potential returns per unit of risk. The AerSale Corp is currently generating about 0.21 of returns per unit of risk over similar time horizon. If you would invest  613.00  in AerSale Corp on December 27, 2024 and sell it today you would earn a total of  227.00  from holding AerSale Corp or generate 37.03% return on investment over 90 days.

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

Ryder System  vs.  AerSale Corp

Ryder System

Risk-Adjusted Performance

Very Weak

Over the last 90 days Ryder System has generated negative risk-adjusted returns adding no value to investors with long positions. Even with latest weak performance, the Stock's basic indicators remain invariable and the latest agitation on Wall Street may also be a sign of long-running gains for the enterprise retail investors.

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.

Pair Trading with Ryder System and AerSale Corp

The main advantage of trading using opposite Ryder System and AerSale Corp positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ryder System 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.

The idea behind Ryder System 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 Commodity Directory module to find actively traded commodities issued by global exchanges.