Correlation Between AerSale Corp and APPLE

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

By analyzing existing cross correlation between AerSale Corp and APPLE INC 3, you can compare the effects of market volatilities on AerSale Corp and APPLE 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 APPLE. Check out your portfolio center. Please also check ongoing floating volatility patterns of AerSale Corp and APPLE.

Diversification Opportunities for AerSale Corp and APPLE

-0.57

Correlation Coefficient

AerSale Corp  APPLE

Excellent diversification

The 3 months correlation between AerSale and APPLE is -0.57. Overlapping area represents the amount of risk that can be diversified away by holding AerSale Corp and APPLE INC 3 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on APPLE INC 3 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 APPLE. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of APPLE INC 3 has no effect on the direction of AerSale Corp i.e., AerSale Corp and APPLE go up and down completely randomly.

Pair Corralation between AerSale Corp and APPLE

Given the investment horizon of 90 days AerSale Corp is expected to generate 7.0 times more return on investment than APPLE. However, AerSale Corp is 7.0 times more volatile than APPLE INC 3. It trades about 0.11 of its potential returns per unit of risk. APPLE INC 3 is currently generating about -0.15 per unit of risk. If you would invest  519.00  in AerSale Corp on September 13, 2024 and sell it today you would earn a total of  101.00  from holding AerSale Corp or generate 19.46% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	95.24%
Values	Daily Returns

AerSale Corp  vs.  APPLE INC 3

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.

APPLE INC 3

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days APPLE INC 3 has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong basic indicators, APPLE is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with AerSale Corp and APPLE

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

The idea behind AerSale Corp and APPLE INC 3 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 Center module to all portfolio management and optimization tools to improve performance of your portfolios.