Correlation Between Air Lease and SEI Investments
Can any of the company-specific risk be diversified away by investing in both Air Lease and SEI Investments 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 SEI Investments into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Air Lease and SEI Investments, you can compare the effects of market volatilities on Air Lease and SEI Investments 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 SEI Investments. Check out your portfolio center. Please also check ongoing floating volatility patterns of Air Lease and SEI Investments.
Diversification Opportunities for Air Lease and SEI Investments
0.84 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Air and SEI is 0.84. Overlapping area represents the amount of risk that can be diversified away by holding Air Lease and SEI Investments in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SEI Investments 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 SEI Investments. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SEI Investments has no effect on the direction of Air Lease i.e., Air Lease and SEI Investments go up and down completely randomly.
Pair Corralation between Air Lease and SEI Investments
Allowing for the 90-day total investment horizon Air Lease is expected to generate 1.49 times more return on investment than SEI Investments. However, Air Lease is 1.49 times more volatile than SEI Investments. It trades about 0.37 of its potential returns per unit of risk. SEI Investments is currently generating about 0.4 per unit of risk. If you would invest 4,435 in Air Lease on September 1, 2024 and sell it today you would earn a total of 655.00 from holding Air Lease or generate 14.77% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Air Lease vs. SEI Investments
Performance |
| Timeline |
| Air Lease |
| SEI Investments |
Air Lease and SEI Investments Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Air Lease and SEI Investments
The main advantage of trading using opposite Air Lease and SEI Investments positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Air Lease position performs unexpectedly, SEI Investments 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 SEI Investments will offset losses from the drop in SEI Investments' long position.| Air Lease vs. McGrath RentCorp | Air Lease vs. Herc Holdings | Air Lease vs. PROG Holdings | Air Lease vs. Custom Truck One |
| SEI Investments vs. Visa Class A | SEI Investments vs. Diamond Hill Investment | SEI Investments vs. Distoken Acquisition | SEI Investments vs. Associated Capital 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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.
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