Correlation Between Aersale Corp and Amazon

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

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

Diversification Opportunities for Aersale Corp and Amazon

-0.31
  Correlation Coefficient
Aersale Corp WT
Amazon Inc

Very good diversification

The 3 months correlation between Aersale and Amazon is -0.31. Overlapping area represents the amount of risk that can be diversified away by holding Aersale Corp WT and Amazon Inc in the same portfolio assuming nothing else is changed. The correlation between historical prices or returns on Amazon Inc 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 WT are associated (or correlated) with Amazon. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Amazon Inc has no effect on the direction of Aersale Corp i.e., Aersale Corp and Amazon go up and down completely randomly.

Pair Corralation between Aersale Corp and Amazon

Assuming the 90 days horizon Aersale Corp WT is expected to generate 5.23 times more return on investment than Amazon. However, Aersale Corp is 5.23 times more volatile than Amazon Inc. It trades about 0.1 of its potential returns per unit of risk. Amazon Inc is currently generating about 0.07 per unit of risk. If you would invest  51.00  in Aersale Corp WT on July 26, 2021 and sell it today you would earn a total of  718.00  from holding Aersale Corp WT or generate 1407.84% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Against 
StrengthInsignificant
Accuracy92.02%
ValuesDaily Returns

Aersale Corp WT  vs.  Amazon Inc

 Performance (%) 
      Timeline 
Aersale Corp WT 
 Aersale Performance
19 of 100
Compared to the overall equity markets, risk-adjusted returns on investments in Aersale Corp WT are ranked lower than 19 (%) of all global equities and portfolios over the last 90 days. In spite of fairly weak technical and fundamental indicators, Aersale Corp showed solid returns over the last few months and may actually be approaching a breakup point.

Aersale Price Channel

Amazon Inc 
 Amazon Performance
0 of 100
Over the last 90 days Amazon Inc has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest fragile performance, the Stock's basic indicators remain persistent and the latest mess on Wall Street may also be a sign of long-standing gains for the company institutional investors.

Amazon Price Channel

Aersale Corp and Amazon Volatility Contrast

 Predicted Return Density 
      Returns 

Pair Trading with Aersale Corp and Amazon

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

Aersale Corp WT

Pair trading matchups for Aersale Corp

The idea behind Aersale Corp WT and Amazon Inc 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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.

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