Correlation Between 35137LAJ4 and AerSale Corp

Can any of the company-specific risk be diversified away by investing in both 35137LAJ4 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 35137LAJ4 and AerSale Corp into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between FOX P and AerSale Corp, you can compare the effects of market volatilities on 35137LAJ4 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 35137LAJ4 with a short position of AerSale Corp. Check out your portfolio center. Please also check ongoing floating volatility patterns of 35137LAJ4 and AerSale Corp.

Diversification Opportunities for 35137LAJ4 and AerSale Corp

-0.33

Correlation Coefficient

35137LAJ4  AerSale Corp

Very good diversification

The 3 months correlation between 35137LAJ4 and AerSale is -0.33. Overlapping area represents the amount of risk that can be diversified away by holding FOX P and AerSale Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AerSale Corp and 35137LAJ4 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 FOX P 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 35137LAJ4 i.e., 35137LAJ4 and AerSale Corp go up and down completely randomly.

Pair Corralation between 35137LAJ4 and AerSale Corp

Assuming the 90 days trading horizon FOX P is expected to under-perform the AerSale Corp. But the bond apears to be less risky and, when comparing its historical volatility, FOX P is 3.52 times less risky than AerSale Corp. The bond trades about -0.04 of its potential returns per unit of risk. The AerSale Corp is currently generating about 0.0 of returns per unit of risk over similar time horizon. If you would invest  673.00  in AerSale Corp on October 13, 2024 and sell it today you would lose (43.00) from holding AerSale Corp or give up 6.39% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	99.3%
Values	Daily Returns

FOX P  vs.  AerSale Corp

35137LAJ4

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days FOX P has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest weak performance, the Bond's basic indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for FOX P investors.

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.

Pair Trading with 35137LAJ4 and AerSale Corp

The main advantage of trading using opposite 35137LAJ4 and AerSale Corp positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if 35137LAJ4 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 FOX P 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 Money Managers module to screen money managers from public funds and ETFs managed around the world.