Correlation Between Air Lease and PHINIA
Can any of the company-specific risk be diversified away by investing in both Air Lease and PHINIA 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 PHINIA into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Air Lease and PHINIA Inc, you can compare the effects of market volatilities on Air Lease and PHINIA 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 PHINIA. Check out your portfolio center. Please also check ongoing floating volatility patterns of Air Lease and PHINIA.
Diversification Opportunities for Air Lease and PHINIA
Almost no diversification
The 3 months correlation between Air and PHINIA is 0.93. Overlapping area represents the amount of risk that can be diversified away by holding Air Lease and PHINIA Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on PHINIA Inc 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 PHINIA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of PHINIA Inc has no effect on the direction of Air Lease i.e., Air Lease and PHINIA go up and down completely randomly.
Pair Corralation between Air Lease and PHINIA
Allowing for the 90-day total investment horizon Air Lease is expected to generate 1.13 times less return on investment than PHINIA. But when comparing it to its historical volatility, Air Lease is 1.48 times less risky than PHINIA. It trades about 0.15 of its potential returns per unit of risk. PHINIA Inc is currently generating about 0.11 of returns per unit of risk over similar time horizon. If you would invest 4,751 in PHINIA Inc on September 4, 2024 and sell it today you would earn a total of 778.00 from holding PHINIA Inc or generate 16.38% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Air Lease vs. PHINIA Inc
Performance |
| Timeline |
| Air Lease |
| PHINIA Inc |
Air Lease and PHINIA Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Air Lease and PHINIA
The main advantage of trading using opposite Air Lease and PHINIA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Air Lease position performs unexpectedly, PHINIA 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 PHINIA will offset losses from the drop in PHINIA'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 |
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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.
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