Correlation Between Air Lease and UNION
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By analyzing existing cross correlation between Air Lease and UNION ELEC 4, you can compare the effects of market volatilities on Air Lease and UNION 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 UNION. Check out your portfolio center. Please also check ongoing floating volatility patterns of Air Lease and UNION.
Diversification Opportunities for Air Lease and UNION
Good diversification
The 3 months correlation between Air and UNION is -0.11. Overlapping area represents the amount of risk that can be diversified away by holding Air Lease and UNION ELEC 4 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on UNION ELEC 4 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 UNION. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of UNION ELEC 4 has no effect on the direction of Air Lease i.e., Air Lease and UNION go up and down completely randomly.
Pair Corralation between Air Lease and UNION
Allowing for the 90-day total investment horizon Air Lease is expected to generate 1.49 times more return on investment than UNION. However, Air Lease is 1.49 times more volatile than UNION ELEC 4. It trades about 0.38 of its potential returns per unit of risk. UNION ELEC 4 is currently generating about 0.08 per unit of risk. If you would invest 4,437 in Air Lease on September 5, 2024 and sell it today you would earn a total of 700.00 from holding Air Lease or generate 15.78% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 45.45% |
| Values | Daily Returns |
Air Lease vs. UNION ELEC 4
Performance |
| Timeline |
| Air Lease |
| UNION ELEC 4 |
Air Lease and UNION Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Air Lease and UNION
The main advantage of trading using opposite Air Lease and UNION positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Air Lease position performs unexpectedly, UNION 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 UNION will offset losses from the drop in UNION'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 |
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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.
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