Correlation Between AerSale Corp and Saker Aviation

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

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

Diversification Opportunities for AerSale Corp and Saker Aviation

-0.52

Correlation Coefficient

AerSale Corp  Saker Aviation

Excellent diversification

The 3 months correlation between AerSale and Saker is -0.52. Overlapping area represents the amount of risk that can be diversified away by holding AerSale Corp and Saker Aviation Services in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Saker Aviation Services 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 Saker Aviation. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Saker Aviation Services has no effect on the direction of AerSale Corp i.e., AerSale Corp and Saker Aviation go up and down completely randomly.

Pair Corralation between AerSale Corp and Saker Aviation

Given the investment horizon of 90 days AerSale Corp is expected to under-perform the Saker Aviation. But the stock apears to be less risky and, when comparing its historical volatility, AerSale Corp is 1.18 times less risky than Saker Aviation. The stock trades about -0.04 of its potential returns per unit of risk. The Saker Aviation Services is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest  560.00  in Saker Aviation Services on September 13, 2024 and sell it today you would earn a total of  240.00  from holding Saker Aviation Services or generate 42.86% return on investment over 90 days.

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

AerSale Corp  vs.  Saker Aviation Services

AerSale Corp

Risk-Adjusted Performance

8 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in AerSale Corp are ranked lower than 8 (%) 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.

Saker Aviation Services

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Saker Aviation Services has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of weak performance in the last few months, the Stock's basic indicators remain comparatively stable which may send shares a bit higher in January 2025. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.

Pair Trading with AerSale Corp and Saker Aviation

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

The idea behind AerSale Corp and Saker Aviation Services 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 Portfolio Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.