Correlation Between AerCap Holdings and Keurig Dr
Can any of the company-specific risk be diversified away by investing in both AerCap Holdings and Keurig Dr 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 Keurig Dr 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 Keurig Dr Pepper, you can compare the effects of market volatilities on AerCap Holdings and Keurig Dr 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 Keurig Dr. Check out your portfolio center. Please also check ongoing floating volatility patterns of AerCap Holdings and Keurig Dr.
Diversification Opportunities for AerCap Holdings and Keurig Dr
-0.27 | Correlation Coefficient |
Very good diversification
The 3 months correlation between AerCap and Keurig is -0.27. Overlapping area represents the amount of risk that can be diversified away by holding AerCap Holdings NV and Keurig Dr Pepper in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Keurig Dr Pepper 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 Keurig Dr. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Keurig Dr Pepper has no effect on the direction of AerCap Holdings i.e., AerCap Holdings and Keurig Dr go up and down completely randomly.
Pair Corralation between AerCap Holdings and Keurig Dr
Considering the 90-day investment horizon AerCap Holdings NV is expected to generate 1.3 times more return on investment than Keurig Dr. However, AerCap Holdings is 1.3 times more volatile than Keurig Dr Pepper. It trades about 0.11 of its potential returns per unit of risk. Keurig Dr Pepper is currently generating about 0.02 per unit of risk. If you would invest 5,363 in AerCap Holdings NV on August 26, 2024 and sell it today you would earn a total of 4,440 from holding AerCap Holdings NV or generate 82.79% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
AerCap Holdings NV vs. Keurig Dr Pepper
Performance |
| Timeline |
| AerCap Holdings NV |
| Keurig Dr Pepper |
AerCap Holdings and Keurig Dr Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with AerCap Holdings and Keurig Dr
The main advantage of trading using opposite AerCap Holdings and Keurig Dr positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if AerCap Holdings position performs unexpectedly, Keurig Dr 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 Keurig Dr will offset losses from the drop in Keurig Dr's long position.| AerCap Holdings vs. Ryder System | AerCap Holdings vs. Alta Equipment Group | AerCap Holdings vs. PROG Holdings | AerCap Holdings vs. GATX Corporation |
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 Latest Portfolios module to quick portfolio dashboard that showcases your latest portfolios.
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