Correlation Between Air Lease and Molson Coors
Can any of the company-specific risk be diversified away by investing in both Air Lease and Molson Coors 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 Molson Coors into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Air Lease and Molson Coors Brewing, you can compare the effects of market volatilities on Air Lease and Molson Coors 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 Molson Coors. Check out your portfolio center. Please also check ongoing floating volatility patterns of Air Lease and Molson Coors.
Diversification Opportunities for Air Lease and Molson Coors
0.9 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Air and Molson is 0.9. Overlapping area represents the amount of risk that can be diversified away by holding Air Lease and Molson Coors Brewing in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Molson Coors Brewing 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 Molson Coors. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Molson Coors Brewing has no effect on the direction of Air Lease i.e., Air Lease and Molson Coors go up and down completely randomly.
Pair Corralation between Air Lease and Molson Coors
Allowing for the 90-day total investment horizon Air Lease is expected to generate 1.29 times more return on investment than Molson Coors. However, Air Lease is 1.29 times more volatile than Molson Coors Brewing. It trades about 0.05 of its potential returns per unit of risk. Molson Coors Brewing is currently generating about 0.01 per unit of risk. If you would invest 3,922 in Air Lease on September 12, 2024 and sell it today you would earn a total of 1,089 from holding Air Lease or generate 27.77% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Air Lease vs. Molson Coors Brewing
Performance |
| Timeline |
| Air Lease |
| Molson Coors Brewing |
Air Lease and Molson Coors Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Air Lease and Molson Coors
The main advantage of trading using opposite Air Lease and Molson Coors positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Air Lease position performs unexpectedly, Molson Coors 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 Molson Coors will offset losses from the drop in Molson Coors' long position.| Air Lease vs. McGrath RentCorp | Air Lease vs. Alta Equipment Group | Air Lease vs. Custom Truck One | Air Lease vs. GATX Corporation |
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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 Sync Your Broker module to sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors..
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