Correlation Between Air Lease and Transportation Fund
Can any of the company-specific risk be diversified away by investing in both Air Lease and Transportation Fund 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 Transportation Fund into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Air Lease and Transportation Fund Class, you can compare the effects of market volatilities on Air Lease and Transportation Fund 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 Transportation Fund. Check out your portfolio center. Please also check ongoing floating volatility patterns of Air Lease and Transportation Fund.
Diversification Opportunities for Air Lease and Transportation Fund
0.8 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Air and Transportation is 0.8. Overlapping area represents the amount of risk that can be diversified away by holding Air Lease and Transportation Fund Class in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Transportation Fund Class 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 Transportation Fund. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Transportation Fund Class has no effect on the direction of Air Lease i.e., Air Lease and Transportation Fund go up and down completely randomly.
Pair Corralation between Air Lease and Transportation Fund
Allowing for the 90-day total investment horizon Air Lease is expected to generate 1.1 times more return on investment than Transportation Fund. However, Air Lease is 1.1 times more volatile than Transportation Fund Class. It trades about 0.33 of its potential returns per unit of risk. Transportation Fund Class is currently generating about 0.22 per unit of risk. If you would invest 4,396 in Air Lease on August 24, 2024 and sell it today you would earn a total of 584.00 from holding Air Lease or generate 13.28% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 95.65% |
| Values | Daily Returns |
Air Lease vs. Transportation Fund Class
Performance |
| Timeline |
| Air Lease |
| Transportation Fund Class |
Air Lease and Transportation Fund Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Air Lease and Transportation Fund
The main advantage of trading using opposite Air Lease and Transportation Fund positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Air Lease position performs unexpectedly, Transportation Fund 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 Transportation Fund will offset losses from the drop in Transportation Fund'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 |
| Transportation Fund vs. Dunham Real Estate | Transportation Fund vs. Neuberger Berman Real | Transportation Fund vs. Amg Managers Centersquare | Transportation Fund vs. Fidelity Real Estate |
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 Flow Index module to determine momentum by analyzing Money Flow Index and other technical indicators.
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