Correlation Between Air Lease and Emeren
Can any of the company-specific risk be diversified away by investing in both Air Lease and Emeren 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 Emeren into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Air Lease and Emeren Group, you can compare the effects of market volatilities on Air Lease and Emeren 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 Emeren. Check out your portfolio center. Please also check ongoing floating volatility patterns of Air Lease and Emeren.
Diversification Opportunities for Air Lease and Emeren
Excellent diversification
The 3 months correlation between Air and Emeren is -0.57. Overlapping area represents the amount of risk that can be diversified away by holding Air Lease and Emeren Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Emeren Group 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 Emeren. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Emeren Group has no effect on the direction of Air Lease i.e., Air Lease and Emeren go up and down completely randomly.
Pair Corralation between Air Lease and Emeren
Allowing for the 90-day total investment horizon Air Lease is expected to generate 2.11 times less return on investment than Emeren. But when comparing it to its historical volatility, Air Lease is 2.07 times less risky than Emeren. It trades about 0.04 of its potential returns per unit of risk. Emeren Group is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest 174.00 in Emeren Group on August 30, 2024 and sell it today you would earn a total of 20.00 from holding Emeren Group or generate 11.49% 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. Emeren Group
Performance |
| Timeline |
| Air Lease |
| Emeren Group |
Air Lease and Emeren Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Air Lease and Emeren
The main advantage of trading using opposite Air Lease and Emeren positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Air Lease position performs unexpectedly, Emeren 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 Emeren will offset losses from the drop in Emeren'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 |
| Emeren vs. Canadian Solar | Emeren vs. Maxeon Solar Technologies | Emeren vs. SolarEdge Technologies | Emeren vs. Sunnova Energy International |
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 Top Crypto Exchanges module to search and analyze digital assets across top global cryptocurrency exchanges.
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