Correlation Between Air Lease and BCB Bancorp
Can any of the company-specific risk be diversified away by investing in both Air Lease and BCB Bancorp 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 Air Lease and BCB Bancorp into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Air Lease and BCB Bancorp, you can compare the effects of market volatilities on Air Lease and BCB Bancorp 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 Air Lease with a short position of BCB Bancorp. Check out your portfolio center. Please also check ongoing floating volatility patterns of Air Lease and BCB Bancorp.
Diversification Opportunities for Air Lease and BCB Bancorp
0.79 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Air and BCB is 0.79. Overlapping area represents the amount of risk that can be diversified away by holding Air Lease and BCB Bancorp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BCB Bancorp and Air Lease 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 Air Lease are associated (or correlated) with BCB Bancorp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of BCB Bancorp has no effect on the direction of Air Lease i.e., Air Lease and BCB Bancorp go up and down completely randomly.
Pair Corralation between Air Lease and BCB Bancorp
Allowing for the 90-day total investment horizon Air Lease is expected to generate 1.21 times more return on investment than BCB Bancorp. However, Air Lease is 1.21 times more volatile than BCB Bancorp. It trades about 0.12 of its potential returns per unit of risk. BCB Bancorp is currently generating about -0.17 per unit of risk. If you would invest 4,834 in Air Lease on September 13, 2024 and sell it today you would earn a total of 177.00 from holding Air Lease or generate 3.66% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Air Lease vs. BCB Bancorp
Performance |
| Timeline |
| Air Lease |
| BCB Bancorp |
Air Lease and BCB Bancorp Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Air Lease and BCB Bancorp
The main advantage of trading using opposite Air Lease and BCB Bancorp positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Air Lease position performs unexpectedly, BCB Bancorp 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 BCB Bancorp will offset losses from the drop in BCB Bancorp's long position.| Air Lease vs. Alta Equipment Group | Air Lease vs. McGrath RentCorp | Air Lease vs. Herc Holdings | Air Lease vs. HE Equipment Services |
| BCB Bancorp vs. Provident Financial Services | BCB Bancorp vs. First Mid Illinois | BCB Bancorp vs. ConnectOne Bancorp | BCB Bancorp vs. Finward Bancorp |
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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.
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