Correlation Between Air Lease and Global Industrial
Can any of the company-specific risk be diversified away by investing in both Air Lease and Global Industrial 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 Global Industrial into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Air Lease and Global Industrial Co, you can compare the effects of market volatilities on Air Lease and Global Industrial 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 Global Industrial. Check out your portfolio center. Please also check ongoing floating volatility patterns of Air Lease and Global Industrial.
Diversification Opportunities for Air Lease and Global Industrial
0.74 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Air and Global is 0.74. Overlapping area represents the amount of risk that can be diversified away by holding Air Lease and Global Industrial Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Global Industrial 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 Global Industrial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Global Industrial has no effect on the direction of Air Lease i.e., Air Lease and Global Industrial go up and down completely randomly.
Pair Corralation between Air Lease and Global Industrial
Allowing for the 90-day total investment horizon Air Lease is expected to generate 0.87 times more return on investment than Global Industrial. However, Air Lease is 1.16 times less risky than Global Industrial. It trades about 0.03 of its potential returns per unit of risk. Global Industrial Co is currently generating about 0.0 per unit of risk. If you would invest 4,165 in Air Lease on November 19, 2024 and sell it today you would earn a total of 780.00 from holding Air Lease or generate 18.73% 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. Global Industrial Co
Performance |
| Timeline |
| Air Lease |
| Global Industrial |
Air Lease and Global Industrial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Air Lease and Global Industrial
The main advantage of trading using opposite Air Lease and Global Industrial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Air Lease position performs unexpectedly, Global Industrial 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 Global Industrial will offset losses from the drop in Global Industrial'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 |
| Global Industrial vs. Distribution Solutions Group | Global Industrial vs. Core Main | Global Industrial vs. Applied Industrial Technologies | Global Industrial vs. BlueLinx Holdings |
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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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