Correlation Between SHIP HEALTHCARE and Air Lease
Can any of the company-specific risk be diversified away by investing in both SHIP HEALTHCARE and Air Lease 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 SHIP HEALTHCARE and Air Lease into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between SHIP HEALTHCARE HLDGINC and Air Lease, you can compare the effects of market volatilities on SHIP HEALTHCARE and Air Lease 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 SHIP HEALTHCARE with a short position of Air Lease. Check out your portfolio center. Please also check ongoing floating volatility patterns of SHIP HEALTHCARE and Air Lease.
Diversification Opportunities for SHIP HEALTHCARE and Air Lease
-0.5 | Correlation Coefficient |
Very good diversification
The 3 months correlation between SHIP and Air is -0.5. Overlapping area represents the amount of risk that can be diversified away by holding SHIP HEALTHCARE HLDGINC and Air Lease in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Air Lease and SHIP HEALTHCARE 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 SHIP HEALTHCARE HLDGINC are associated (or correlated) with Air Lease. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Air Lease has no effect on the direction of SHIP HEALTHCARE i.e., SHIP HEALTHCARE and Air Lease go up and down completely randomly.
Pair Corralation between SHIP HEALTHCARE and Air Lease
Assuming the 90 days horizon SHIP HEALTHCARE is expected to generate 43.13 times less return on investment than Air Lease. But when comparing it to its historical volatility, SHIP HEALTHCARE HLDGINC is 1.08 times less risky than Air Lease. It trades about 0.01 of its potential returns per unit of risk. Air Lease is currently generating about 0.37 of returns per unit of risk over similar time horizon. If you would invest 4,060 in Air Lease on September 3, 2024 and sell it today you would earn a total of 700.00 from holding Air Lease or generate 17.24% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
SHIP HEALTHCARE HLDGINC vs. Air Lease
Performance |
| Timeline |
| SHIP HEALTHCARE HLDGINC |
| Air Lease |
SHIP HEALTHCARE and Air Lease Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SHIP HEALTHCARE and Air Lease
The main advantage of trading using opposite SHIP HEALTHCARE and Air Lease positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SHIP HEALTHCARE position performs unexpectedly, Air Lease 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 Air Lease will offset losses from the drop in Air Lease's long position.| SHIP HEALTHCARE vs. DEVRY EDUCATION GRP | SHIP HEALTHCARE vs. Titan Machinery | SHIP HEALTHCARE vs. CHINA EDUCATION GROUP | SHIP HEALTHCARE vs. United Utilities Group |
| Air Lease vs. Air Transport Services | Air Lease vs. VIRGIN WINES UK | Air Lease vs. TEXAS ROADHOUSE | Air Lease vs. Broadcom |
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 Price Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.
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