Correlation Between Air Lease and Jeld Wen
Can any of the company-specific risk be diversified away by investing in both Air Lease and Jeld Wen 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 Jeld Wen into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Air Lease and Jeld Wen Holding, you can compare the effects of market volatilities on Air Lease and Jeld Wen 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 Jeld Wen. Check out your portfolio center. Please also check ongoing floating volatility patterns of Air Lease and Jeld Wen.
Diversification Opportunities for Air Lease and Jeld Wen
Excellent diversification
The 3 months correlation between Air and Jeld is -0.69. Overlapping area represents the amount of risk that can be diversified away by holding Air Lease and Jeld Wen Holding in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Jeld Wen Holding 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 Jeld Wen. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Jeld Wen Holding has no effect on the direction of Air Lease i.e., Air Lease and Jeld Wen go up and down completely randomly.
Pair Corralation between Air Lease and Jeld Wen
Allowing for the 90-day total investment horizon Air Lease is expected to generate 0.24 times more return on investment than Jeld Wen. However, Air Lease is 4.13 times less risky than Jeld Wen. It trades about 0.39 of its potential returns per unit of risk. Jeld Wen Holding is currently generating about -0.12 per unit of risk. If you would invest 4,497 in Air Lease on August 27, 2024 and sell it today you would earn a total of 719.00 from holding Air Lease or generate 15.99% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Air Lease vs. Jeld Wen Holding
Performance |
| Timeline |
| Air Lease |
| Jeld Wen Holding |
Air Lease and Jeld Wen Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Air Lease and Jeld Wen
The main advantage of trading using opposite Air Lease and Jeld Wen positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Air Lease position performs unexpectedly, Jeld Wen 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 Jeld Wen will offset losses from the drop in Jeld Wen'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 |
| Jeld Wen vs. Trex Company | Jeld Wen vs. Gibraltar Industries | Jeld Wen vs. Travis Perkins PLC | Jeld Wen vs. Janus International Group |
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 Money Managers module to screen money managers from public funds and ETFs managed around the world.
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