Correlation Between AerSale Corp and Advantage Solutions

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

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

Diversification Opportunities for AerSale Corp and Advantage Solutions

0.43

Correlation Coefficient

AerSale Corp  Advantage Solutions

Very weak diversification

The 3 months correlation between AerSale and Advantage is 0.43. Overlapping area represents the amount of risk that can be diversified away by holding AerSale Corp and Advantage Solutions in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Advantage Solutions 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 Advantage Solutions. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Advantage Solutions has no effect on the direction of AerSale Corp i.e., AerSale Corp and Advantage Solutions go up and down completely randomly.

Pair Corralation between AerSale Corp and Advantage Solutions

Given the investment horizon of 90 days AerSale Corp is expected to generate 0.56 times more return on investment than Advantage Solutions. However, AerSale Corp is 1.78 times less risky than Advantage Solutions. It trades about -0.06 of its potential returns per unit of risk. Advantage Solutions is currently generating about -0.15 per unit of risk. If you would invest  697.00  in AerSale Corp on March 5, 2025 and sell it today you would lose (117.00) from holding AerSale Corp or give up 16.79% of portfolio value over 90 days.

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

AerSale Corp  vs.  Advantage Solutions

AerSale Corp

Risk-Adjusted Performance

Very Weak

Over the last 90 days AerSale Corp 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 essential indicators remain rather sound which may send shares a bit higher in July 2025. The latest tumult may also be a sign of longer-term up-swing for the firm shareholders.

Advantage Solutions

Risk-Adjusted Performance

Very Weak

Over the last 90 days Advantage Solutions has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of unfluctuating performance in the last few months, the Stock's fundamental indicators remain fairly stable which may send shares a bit higher in July 2025. The latest fuss may also be a sign of long-term up-swing for the venture sophisticated investors.

Pair Trading with AerSale Corp and Advantage Solutions

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

The idea behind AerSale Corp and Advantage Solutions 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 ETFs module to find actively traded Exchange Traded Funds (ETF) from around the world.