Correlation Between AerCap Holdings and BOS Better
Can any of the company-specific risk be diversified away by investing in both AerCap Holdings and BOS Better 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 AerCap Holdings and BOS Better into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between AerCap Holdings NV and BOS Better Online, you can compare the effects of market volatilities on AerCap Holdings and BOS Better 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 AerCap Holdings with a short position of BOS Better. Check out your portfolio center. Please also check ongoing floating volatility patterns of AerCap Holdings and BOS Better.
Diversification Opportunities for AerCap Holdings and BOS Better
0.54 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between AerCap and BOS is 0.54. Overlapping area represents the amount of risk that can be diversified away by holding AerCap Holdings NV and BOS Better Online in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BOS Better Online and AerCap Holdings 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 AerCap Holdings NV are associated (or correlated) with BOS Better. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of BOS Better Online has no effect on the direction of AerCap Holdings i.e., AerCap Holdings and BOS Better go up and down completely randomly.
Pair Corralation between AerCap Holdings and BOS Better
Considering the 90-day investment horizon AerCap Holdings is expected to generate 1.07 times less return on investment than BOS Better. But when comparing it to its historical volatility, AerCap Holdings NV is 1.64 times less risky than BOS Better. It trades about 0.07 of its potential returns per unit of risk. BOS Better Online is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest 216.00 in BOS Better Online on August 27, 2024 and sell it today you would earn a total of 119.00 from holding BOS Better Online or generate 55.09% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
AerCap Holdings NV vs. BOS Better Online
Performance |
| Timeline |
| AerCap Holdings NV |
| BOS Better Online |
AerCap Holdings and BOS Better Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with AerCap Holdings and BOS Better
The main advantage of trading using opposite AerCap Holdings and BOS Better positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if AerCap Holdings position performs unexpectedly, BOS Better 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 BOS Better will offset losses from the drop in BOS Better's long position.| AerCap Holdings vs. Ryder System | AerCap Holdings vs. Alta Equipment Group | AerCap Holdings vs. PROG Holdings | AerCap Holdings vs. GATX Corporation |
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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 Investing Opportunities module to build portfolios using our predefined set of ideas and optimize them against your investing preferences.
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