Correlation Between Spring Valley and AerCap Holdings

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

By analyzing existing cross correlation between Spring Valley Acquisition and AerCap Holdings NV, you can compare the effects of market volatilities on Spring Valley and AerCap Holdings 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 Spring Valley with a short position of AerCap Holdings. Check out your portfolio center. Please also check ongoing floating volatility patterns of Spring Valley and AerCap Holdings.

Diversification Opportunities for Spring Valley and AerCap Holdings

-0.22

Correlation Coefficient

Spring Valley  AerCap Holdings

Very good diversification

The 3 months correlation between Spring and AerCap is -0.22. Overlapping area represents the amount of risk that can be diversified away by holding Spring Valley Acquisition and AerCap Holdings NV in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AerCap Holdings NV and Spring Valley 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 Spring Valley Acquisition are associated (or correlated) with AerCap Holdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of AerCap Holdings NV has no effect on the direction of Spring Valley i.e., Spring Valley and AerCap Holdings go up and down completely randomly.

Pair Corralation between Spring Valley and AerCap Holdings

Assuming the 90 days horizon Spring Valley Acquisition is expected to generate 19.66 times more return on investment than AerCap Holdings. However, Spring Valley is 19.66 times more volatile than AerCap Holdings NV. It trades about 0.22 of its potential returns per unit of risk. AerCap Holdings NV is currently generating about 0.02 per unit of risk. If you would invest  8.95  in Spring Valley Acquisition on May 5, 2025 and sell it today you would earn a total of  19.05  from holding Spring Valley Acquisition or generate 212.85% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	73.02%
Values	Daily Returns

Spring Valley Acquisition  vs.  AerCap Holdings NV

Spring Valley Acquisition

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Spring Valley Acquisition are ranked lower than 17 (%) of all global equities and portfolios over the last 90 days. Even with relatively uncertain forward indicators, Spring Valley reported solid returns over the last few months and may actually be approaching a breakup point.

AerCap Holdings NV

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in AerCap Holdings NV are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. Even with relatively invariable technical and fundamental indicators, AerCap Holdings is not utilizing all of its potentials. The latest stock price agitation, may contribute to short-term losses for the retail investors.

Pair Trading with Spring Valley and AerCap Holdings

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

The idea behind Spring Valley Acquisition and AerCap Holdings NV 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 Alpha Finder module to use alpha and beta coefficients to find investment opportunities after accounting for the risk.