Correlation Between ELEMENT FLEET and Air Lease
Can any of the company-specific risk be diversified away by investing in both ELEMENT FLEET 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 ELEMENT FLEET and Air Lease into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between ELEMENT FLEET MGMT and Air Lease, you can compare the effects of market volatilities on ELEMENT FLEET 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 ELEMENT FLEET with a short position of Air Lease. Check out your portfolio center. Please also check ongoing floating volatility patterns of ELEMENT FLEET and Air Lease.
Diversification Opportunities for ELEMENT FLEET and Air Lease
0.66 | Correlation Coefficient |
Poor diversification
The 3 months correlation between ELEMENT and Air is 0.66. Overlapping area represents the amount of risk that can be diversified away by holding ELEMENT FLEET MGMT and Air Lease in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Air Lease and ELEMENT FLEET 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 ELEMENT FLEET MGMT 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 ELEMENT FLEET i.e., ELEMENT FLEET and Air Lease go up and down completely randomly.
Pair Corralation between ELEMENT FLEET and Air Lease
Assuming the 90 days horizon ELEMENT FLEET MGMT is expected to generate 1.12 times more return on investment than Air Lease. However, ELEMENT FLEET is 1.12 times more volatile than Air Lease. It trades about 0.07 of its potential returns per unit of risk. Air Lease is currently generating about 0.06 per unit of risk. If you would invest 1,435 in ELEMENT FLEET MGMT on September 12, 2024 and sell it today you would earn a total of 495.00 from holding ELEMENT FLEET MGMT or generate 34.49% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
ELEMENT FLEET MGMT vs. Air Lease
Performance |
| Timeline |
| ELEMENT FLEET MGMT |
| Air Lease |
ELEMENT FLEET and Air Lease Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with ELEMENT FLEET and Air Lease
The main advantage of trading using opposite ELEMENT FLEET and Air Lease positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ELEMENT FLEET 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.| ELEMENT FLEET vs. Tyson Foods | ELEMENT FLEET vs. National Beverage Corp | ELEMENT FLEET vs. Infrastrutture Wireless Italiane | ELEMENT FLEET vs. Tower One Wireless |
| Air Lease vs. United Rentals | Air Lease vs. WillScot Mobile Mini | Air Lease vs. Superior Plus Corp | Air Lease vs. SIVERS SEMICONDUCTORS AB |
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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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