Correlation Between Air Lease and Ross Stores
Can any of the company-specific risk be diversified away by investing in both Air Lease and Ross Stores 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 Ross Stores into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Air Lease and Ross Stores, you can compare the effects of market volatilities on Air Lease and Ross Stores 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 Ross Stores. Check out your portfolio center. Please also check ongoing floating volatility patterns of Air Lease and Ross Stores.
Diversification Opportunities for Air Lease and Ross Stores
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Air and Ross is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Air Lease and Ross Stores in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ross Stores 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 Ross Stores. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ross Stores has no effect on the direction of Air Lease i.e., Air Lease and Ross Stores go up and down completely randomly.
Pair Corralation between Air Lease and Ross Stores
Allowing for the 90-day total investment horizon Air Lease is expected to generate 1.47 times more return on investment than Ross Stores. However, Air Lease is 1.47 times more volatile than Ross Stores. It trades about 0.06 of its potential returns per unit of risk. Ross Stores is currently generating about 0.05 per unit of risk. If you would invest 3,895 in Air Lease on September 4, 2024 and sell it today you would earn a total of 1,165 from holding Air Lease or generate 29.91% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Air Lease vs. Ross Stores
Performance |
| Timeline |
| Air Lease |
| Ross Stores |
Air Lease and Ross Stores Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Air Lease and Ross Stores
The main advantage of trading using opposite Air Lease and Ross Stores positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Air Lease position performs unexpectedly, Ross Stores 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 Ross Stores will offset losses from the drop in Ross Stores' long position.| Air Lease vs. Alta Equipment Group | Air Lease vs. McGrath RentCorp | Air Lease vs. Herc Holdings | Air Lease vs. HE Equipment Services |
| Ross Stores vs. Burlington Stores | Ross Stores vs. American Eagle Outfitters | Ross Stores vs. Lululemon Athletica | Ross Stores vs. Foot Locker |
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 Global Correlations module to find global opportunities by holding instruments from different markets.
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