Correlation Between Air Lease and National Beverage
Can any of the company-specific risk be diversified away by investing in both Air Lease and National Beverage 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 National Beverage into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Air Lease and National Beverage Corp, you can compare the effects of market volatilities on Air Lease and National Beverage 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 National Beverage. Check out your portfolio center. Please also check ongoing floating volatility patterns of Air Lease and National Beverage.
Diversification Opportunities for Air Lease and National Beverage
0.86 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Air and National is 0.86. Overlapping area represents the amount of risk that can be diversified away by holding Air Lease and National Beverage Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on National Beverage Corp 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 National Beverage. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of National Beverage Corp has no effect on the direction of Air Lease i.e., Air Lease and National Beverage go up and down completely randomly.
Pair Corralation between Air Lease and National Beverage
Allowing for the 90-day total investment horizon Air Lease is expected to generate 0.99 times more return on investment than National Beverage. However, Air Lease is 1.01 times less risky than National Beverage. It trades about 0.05 of its potential returns per unit of risk. National Beverage Corp is currently generating about 0.0 per unit of risk. If you would invest 3,922 in Air Lease on September 12, 2024 and sell it today you would earn a total of 1,089 from holding Air Lease or generate 27.77% 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. National Beverage Corp
Performance |
| Timeline |
| Air Lease |
| National Beverage Corp |
Air Lease and National Beverage Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Air Lease and National Beverage
The main advantage of trading using opposite Air Lease and National Beverage positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Air Lease position performs unexpectedly, National Beverage 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 National Beverage will offset losses from the drop in National Beverage's long position.| Air Lease vs. McGrath RentCorp | Air Lease vs. Alta Equipment Group | Air Lease vs. Custom Truck One | Air Lease vs. GATX Corporation |
| National Beverage vs. Celsius Holdings | National Beverage vs. Monster Beverage Corp | National Beverage vs. Coca Cola Femsa SAB | National Beverage vs. Keurig Dr Pepper |
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 Stocks Directory module to find actively traded stocks across global markets.
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