Correlation Between Superior Plus and Air Lease
Can any of the company-specific risk be diversified away by investing in both Superior Plus 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 Superior Plus and Air Lease into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Superior Plus Corp and Air Lease, you can compare the effects of market volatilities on Superior Plus 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 Superior Plus with a short position of Air Lease. Check out your portfolio center. Please also check ongoing floating volatility patterns of Superior Plus and Air Lease.
Diversification Opportunities for Superior Plus and Air Lease
-0.76 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Superior and Air is -0.76. Overlapping area represents the amount of risk that can be diversified away by holding Superior Plus Corp and Air Lease in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Air Lease and Superior Plus 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 Superior Plus Corp 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 Superior Plus i.e., Superior Plus and Air Lease go up and down completely randomly.
Pair Corralation between Superior Plus and Air Lease
Assuming the 90 days horizon Superior Plus Corp is expected to under-perform the Air Lease. In addition to that, Superior Plus is 1.2 times more volatile than Air Lease. It trades about -0.02 of its total potential returns per unit of risk. Air Lease is currently generating about 0.04 per unit of volatility. If you would invest 3,469 in Air Lease on August 24, 2024 and sell it today you would earn a total of 1,071 from holding Air Lease or generate 30.87% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Superior Plus Corp vs. Air Lease
Performance |
| Timeline |
| Superior Plus Corp |
| Air Lease |
Superior Plus and Air Lease Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Superior Plus and Air Lease
The main advantage of trading using opposite Superior Plus and Air Lease positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Superior Plus 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.| Superior Plus vs. SBI Insurance Group | Superior Plus vs. Ping An Insurance | Superior Plus vs. Safety Insurance Group | Superior Plus vs. MSAD INSURANCE |
| Air Lease vs. United Rentals | Air Lease vs. WillScot Mobile Mini | Air Lease vs. Superior Plus Corp | Air Lease vs. NMI Holdings |
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 Bonds Directory module to find actively traded corporate debentures issued by US companies.
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