Correlation Between Air Lease and Anheuser Busch
Can any of the company-specific risk be diversified away by investing in both Air Lease and Anheuser Busch 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 Anheuser Busch into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Air Lease and Anheuser Busch Inbev, you can compare the effects of market volatilities on Air Lease and Anheuser Busch 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 Anheuser Busch. Check out your portfolio center. Please also check ongoing floating volatility patterns of Air Lease and Anheuser Busch.
Diversification Opportunities for Air Lease and Anheuser Busch
-0.81 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Air and Anheuser is -0.81. Overlapping area represents the amount of risk that can be diversified away by holding Air Lease and Anheuser Busch Inbev in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Anheuser Busch Inbev 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 Anheuser Busch. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Anheuser Busch Inbev has no effect on the direction of Air Lease i.e., Air Lease and Anheuser Busch go up and down completely randomly.
Pair Corralation between Air Lease and Anheuser Busch
Allowing for the 90-day total investment horizon Air Lease is expected to generate 1.38 times more return on investment than Anheuser Busch. However, Air Lease is 1.38 times more volatile than Anheuser Busch Inbev. It trades about 0.04 of its potential returns per unit of risk. Anheuser Busch Inbev is currently generating about 0.0 per unit of risk. If you would invest 3,694 in Air Lease on August 27, 2024 and sell it today you would earn a total of 1,370 from holding Air Lease or generate 37.09% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Air Lease vs. Anheuser Busch Inbev
Performance |
| Timeline |
| Air Lease |
| Anheuser Busch Inbev |
Air Lease and Anheuser Busch Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Air Lease and Anheuser Busch
The main advantage of trading using opposite Air Lease and Anheuser Busch positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Air Lease position performs unexpectedly, Anheuser Busch 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 Anheuser Busch will offset losses from the drop in Anheuser Busch'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 |
| Anheuser Busch vs. Boston Beer | Anheuser Busch vs. Molson Coors Beverage | Anheuser Busch vs. Heineken NV | Anheuser Busch vs. Ambev SA ADR |
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 Competition Analyzer module to analyze and compare many basic indicators for a group of related or unrelated entities.
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