Correlation Between AerSale Corp and Hewlett Packard

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

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

Diversification Opportunities for AerSale Corp and Hewlett Packard

0.55

Correlation Coefficient

AerSale Corp  Hewlett Packard

Very weak diversification

The 3 months correlation between AerSale and Hewlett is 0.55. Overlapping area represents the amount of risk that can be diversified away by holding AerSale Corp and Hewlett Packard Enterprise in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hewlett Packard Ente 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 Hewlett Packard. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hewlett Packard Ente has no effect on the direction of AerSale Corp i.e., AerSale Corp and Hewlett Packard go up and down completely randomly.

Pair Corralation between AerSale Corp and Hewlett Packard

Given the investment horizon of 90 days AerSale Corp is expected to generate 1.42 times more return on investment than Hewlett Packard. However, AerSale Corp is 1.42 times more volatile than Hewlett Packard Enterprise. It trades about 0.12 of its potential returns per unit of risk. Hewlett Packard Enterprise is currently generating about 0.1 per unit of risk. If you would invest  507.00  in AerSale Corp on September 18, 2024 and sell it today you would earn a total of  110.00  from holding AerSale Corp or generate 21.7% return on investment over 90 days.

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

AerSale Corp  vs.  Hewlett Packard Enterprise

AerSale Corp

Risk-Adjusted Performance

9 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in AerSale Corp are ranked lower than 9 (%) 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.

Hewlett Packard Ente

Risk-Adjusted Performance

7 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Hewlett Packard Enterprise are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. In spite of rather unsteady technical and fundamental indicators, Hewlett Packard exhibited solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with AerSale Corp and Hewlett Packard

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

The idea behind AerSale Corp and Hewlett Packard Enterprise 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 Sign In To Macroaxis module to sign in to explore Macroaxis' wealth optimization platform and fintech modules.