Correlation Between Shui On and AerSale Corp

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

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

Diversification Opportunities for Shui On and AerSale Corp

0.38

Correlation Coefficient

Shui On  AerSale Corp

Weak diversification

The 3 months correlation between Shui and AerSale is 0.38. Overlapping area represents the amount of risk that can be diversified away by holding Shui On Land and AerSale Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AerSale Corp and Shui On 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 Shui On Land 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 Shui On i.e., Shui On and AerSale Corp go up and down completely randomly.

Pair Corralation between Shui On and AerSale Corp

If you would invest  611.00  in AerSale Corp on September 20, 2024 and sell it today you would lose (3.00) from holding AerSale Corp or give up 0.49% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	4.55%
Values	Daily Returns

Shui On Land  vs.  AerSale Corp

Shui On Land

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Shui On Land has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable essential indicators, Shui On is not utilizing all of its potentials. The newest stock price disturbance, may contribute to mid-run losses for the stockholders.

AerSale Corp

Risk-Adjusted Performance

6 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in AerSale Corp are ranked lower than 6 (%) 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 Shui On and AerSale Corp

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

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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.