Correlation Between Air Lease and Legato Merger
Can any of the company-specific risk be diversified away by investing in both Air Lease and Legato Merger 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 Legato Merger into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Air Lease and Legato Merger II, you can compare the effects of market volatilities on Air Lease and Legato Merger 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 Legato Merger. Check out your portfolio center. Please also check ongoing floating volatility patterns of Air Lease and Legato Merger.
Diversification Opportunities for Air Lease and Legato Merger
-0.54 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Air and Legato is -0.54. Overlapping area represents the amount of risk that can be diversified away by holding Air Lease and Legato Merger II in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Legato Merger II 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 Legato Merger. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Legato Merger II has no effect on the direction of Air Lease i.e., Air Lease and Legato Merger go up and down completely randomly.
Pair Corralation between Air Lease and Legato Merger
Allowing for the 90-day total investment horizon Air Lease is expected to generate 0.45 times more return on investment than Legato Merger. However, Air Lease is 2.24 times less risky than Legato Merger. It trades about 0.07 of its potential returns per unit of risk. Legato Merger II is currently generating about -0.03 per unit of risk. If you would invest 3,806 in Air Lease on August 26, 2024 and sell it today you would earn a total of 1,258 from holding Air Lease or generate 33.05% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Air Lease vs. Legato Merger II
Performance |
| Timeline |
| Air Lease |
| Legato Merger II |
Air Lease and Legato Merger Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Air Lease and Legato Merger
The main advantage of trading using opposite Air Lease and Legato Merger positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Air Lease position performs unexpectedly, Legato Merger 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 Legato Merger will offset losses from the drop in Legato Merger'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 |
| Legato Merger vs. Sellas Life Sciences | Legato Merger vs. Apogee Therapeutics, Common | Legato Merger vs. Tscan Therapeutics | Legato Merger vs. Bright Scholar Education |
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 Equity Valuation module to check real value of public entities based on technical and fundamental data.
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