Correlation Between Air Lease and Black Hills
Can any of the company-specific risk be diversified away by investing in both Air Lease and Black Hills 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 Black Hills into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Air Lease and Black Hills, you can compare the effects of market volatilities on Air Lease and Black Hills 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 Black Hills. Check out your portfolio center. Please also check ongoing floating volatility patterns of Air Lease and Black Hills.
Diversification Opportunities for Air Lease and Black Hills
0.79 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Air and Black is 0.79. Overlapping area represents the amount of risk that can be diversified away by holding Air Lease and Black Hills in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Black Hills 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 Black Hills. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Black Hills has no effect on the direction of Air Lease i.e., Air Lease and Black Hills go up and down completely randomly.
Pair Corralation between Air Lease and Black Hills
Allowing for the 90-day total investment horizon Air Lease is expected to generate 1.31 times more return on investment than Black Hills. However, Air Lease is 1.31 times more volatile than Black Hills. It trades about 0.31 of its potential returns per unit of risk. Black Hills is currently generating about 0.24 per unit of risk. If you would invest 4,479 in Air Lease on August 30, 2024 and sell it today you would earn a total of 592.00 from holding Air Lease or generate 13.22% 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. Black Hills
Performance |
| Timeline |
| Air Lease |
| Black Hills |
Air Lease and Black Hills Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Air Lease and Black Hills
The main advantage of trading using opposite Air Lease and Black Hills positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Air Lease position performs unexpectedly, Black Hills 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 Black Hills will offset losses from the drop in Black Hills' long position.| Air Lease vs. Alta Equipment Group | Air Lease vs. McGrath RentCorp | Air Lease vs. Herc Holdings | Air Lease vs. HE Equipment Services |
| Black Hills vs. NorthWestern | Black Hills vs. Avista | Black Hills vs. Otter Tail | Black Hills vs. Companhia Paranaense de |
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 Portfolio Suggestion module to get suggestions outside of your existing asset allocation including your own model portfolios.
Other Complementary Tools
| Stock Screener Find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook. | |
| Cryptocurrency Center Build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency | |
| Efficient Frontier Plot and analyze your portfolio and positions against risk-return landscape of the market. | |
| Technical Analysis Check basic technical indicators and analysis based on most latest market data | |
| USA ETFs Find actively traded Exchange Traded Funds (ETF) in USA |