Correlation Between Air Lease and Transcat
Can any of the company-specific risk be diversified away by investing in both Air Lease and Transcat 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 Transcat into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Air Lease and Transcat, you can compare the effects of market volatilities on Air Lease and Transcat 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 Transcat. Check out your portfolio center. Please also check ongoing floating volatility patterns of Air Lease and Transcat.
Diversification Opportunities for Air Lease and Transcat
Excellent diversification
The 3 months correlation between Air and Transcat is -0.52. Overlapping area represents the amount of risk that can be diversified away by holding Air Lease and Transcat in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Transcat 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 Transcat. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Transcat has no effect on the direction of Air Lease i.e., Air Lease and Transcat go up and down completely randomly.
Pair Corralation between Air Lease and Transcat
Allowing for the 90-day total investment horizon Air Lease is expected to generate 0.63 times more return on investment than Transcat. However, Air Lease is 1.59 times less risky than Transcat. It trades about 0.35 of its potential returns per unit of risk. Transcat is currently generating about 0.17 per unit of risk. If you would invest 4,476 in Air Lease on September 2, 2024 and sell it today you would earn a total of 614.00 from holding Air Lease or generate 13.72% 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. Transcat
Performance |
| Timeline |
| Air Lease |
| Transcat |
Air Lease and Transcat Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Air Lease and Transcat
The main advantage of trading using opposite Air Lease and Transcat positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Air Lease position performs unexpectedly, Transcat 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 Transcat will offset losses from the drop in Transcat'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 |
| Transcat vs. BlueLinx Holdings | Transcat vs. SiteOne Landscape Supply | Transcat vs. DXP Enterprises | Transcat vs. Core Main |
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 Portfolio Dashboard module to portfolio dashboard that provides centralized access to all your investments.
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