Correlation Between Air Lease and Cass Information
Can any of the company-specific risk be diversified away by investing in both Air Lease and Cass Information 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 Cass Information into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Air Lease and Cass Information Systems, you can compare the effects of market volatilities on Air Lease and Cass Information 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 Cass Information. Check out your portfolio center. Please also check ongoing floating volatility patterns of Air Lease and Cass Information.
Diversification Opportunities for Air Lease and Cass Information
0.86 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Air and Cass is 0.86. Overlapping area represents the amount of risk that can be diversified away by holding Air Lease and Cass Information Systems in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cass Information Systems 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 Cass Information. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Cass Information Systems has no effect on the direction of Air Lease i.e., Air Lease and Cass Information go up and down completely randomly.
Pair Corralation between Air Lease and Cass Information
Allowing for the 90-day total investment horizon Air Lease is expected to generate 0.98 times more return on investment than Cass Information. However, Air Lease is 1.02 times less risky than Cass Information. It trades about 0.08 of its potential returns per unit of risk. Cass Information Systems is currently generating about 0.0 per unit of risk. If you would invest 3,955 in Air Lease on August 27, 2024 and sell it today you would earn a total of 1,109 from holding Air Lease or generate 28.04% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Air Lease vs. Cass Information Systems
Performance |
| Timeline |
| Air Lease |
| Cass Information Systems |
Air Lease and Cass Information Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Air Lease and Cass Information
The main advantage of trading using opposite Air Lease and Cass Information positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Air Lease position performs unexpectedly, Cass Information 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 Cass Information will offset losses from the drop in Cass Information'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 |
| Cass Information vs. First Advantage Corp | Cass Information vs. Rentokil Initial PLC | Cass Information vs. CBIZ Inc | Cass Information vs. Civeo Corp |
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 Center module to all portfolio management and optimization tools to improve performance of your portfolios.
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