Correlation Between Air Lease and Skechers USA
Can any of the company-specific risk be diversified away by investing in both Air Lease and Skechers USA 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 Skechers USA into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Air Lease and Skechers USA, you can compare the effects of market volatilities on Air Lease and Skechers USA 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 Skechers USA. Check out your portfolio center. Please also check ongoing floating volatility patterns of Air Lease and Skechers USA.
Diversification Opportunities for Air Lease and Skechers USA
-0.48 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Air and Skechers is -0.48. Overlapping area represents the amount of risk that can be diversified away by holding Air Lease and Skechers USA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Skechers USA 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 Skechers USA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Skechers USA has no effect on the direction of Air Lease i.e., Air Lease and Skechers USA go up and down completely randomly.
Pair Corralation between Air Lease and Skechers USA
Allowing for the 90-day total investment horizon Air Lease is expected to generate 1.11 times more return on investment than Skechers USA. However, Air Lease is 1.11 times more volatile than Skechers USA. It trades about 0.37 of its potential returns per unit of risk. Skechers USA is currently generating about 0.12 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 Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Air Lease vs. Skechers USA
Performance |
| Timeline |
| Air Lease |
| Skechers USA |
Air Lease and Skechers USA Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Air Lease and Skechers USA
The main advantage of trading using opposite Air Lease and Skechers USA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Air Lease position performs unexpectedly, Skechers USA 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 Skechers USA will offset losses from the drop in Skechers USA's long position.| Air Lease vs. McGrath RentCorp | Air Lease vs. Herc Holdings | Air Lease vs. PROG Holdings | Air Lease vs. Custom Truck One |
| Skechers USA vs. Deckers Outdoor | Skechers USA vs. On Holding | Skechers USA vs. Crocs Inc | Skechers USA vs. Designer Brands |
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 ETFs module to find actively traded Exchange Traded Funds (ETF) from around the world.
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