Correlation Between AerSale Corp and Vodka Brands

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

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

Diversification Opportunities for AerSale Corp and Vodka Brands

0.11

Correlation Coefficient

AerSale Corp  Vodka Brands

Average diversification

The 3 months correlation between AerSale and Vodka is 0.11. Overlapping area represents the amount of risk that can be diversified away by holding AerSale Corp and Vodka Brands Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Vodka Brands Corp 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 Vodka Brands. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Vodka Brands Corp has no effect on the direction of AerSale Corp i.e., AerSale Corp and Vodka Brands go up and down completely randomly.

Pair Corralation between AerSale Corp and Vodka Brands

Given the investment horizon of 90 days AerSale Corp is expected to generate 0.86 times more return on investment than Vodka Brands. However, AerSale Corp is 1.16 times less risky than Vodka Brands. It trades about 0.14 of its potential returns per unit of risk. Vodka Brands Corp is currently generating about 0.05 per unit of risk. If you would invest  474.00  in AerSale Corp on September 4, 2024 and sell it today you would earn a total of  136.00  from holding AerSale Corp or generate 28.69% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	98.46%
Values	Daily Returns

AerSale Corp  vs.  Vodka Brands Corp

AerSale Corp

Risk-Adjusted Performance

11 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in AerSale Corp are ranked lower than 11 (%) 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.

Vodka Brands Corp

Risk-Adjusted Performance

3 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Vodka Brands Corp are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak forward-looking signals, Vodka Brands may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Pair Trading with AerSale Corp and Vodka Brands

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

The idea behind AerSale Corp and Vodka Brands 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 Investing Opportunities module to build portfolios using our predefined set of ideas and optimize them against your investing preferences.