Correlation Between Air Lease and USA Recycling
Can any of the company-specific risk be diversified away by investing in both Air Lease and USA Recycling 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 USA Recycling into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Air Lease and USA Recycling Industries, you can compare the effects of market volatilities on Air Lease and USA Recycling 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 USA Recycling. Check out your portfolio center. Please also check ongoing floating volatility patterns of Air Lease and USA Recycling.
Diversification Opportunities for Air Lease and USA Recycling
-0.31 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Air and USA is -0.31. Overlapping area represents the amount of risk that can be diversified away by holding Air Lease and USA Recycling Industries in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on USA Recycling Industries 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 USA Recycling. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of USA Recycling Industries has no effect on the direction of Air Lease i.e., Air Lease and USA Recycling go up and down completely randomly.
Pair Corralation between Air Lease and USA Recycling
Allowing for the 90-day total investment horizon Air Lease is expected to generate 0.32 times more return on investment than USA Recycling. However, Air Lease is 3.09 times less risky than USA Recycling. It trades about 0.06 of its potential returns per unit of risk. USA Recycling Industries is currently generating about -0.06 per unit of risk. If you would invest 3,996 in Air Lease on September 12, 2024 and sell it today you would earn a total of 1,010 from holding Air Lease or generate 25.28% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Air Lease vs. USA Recycling Industries
Performance |
| Timeline |
| Air Lease |
| USA Recycling Industries |
Air Lease and USA Recycling Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Air Lease and USA Recycling
The main advantage of trading using opposite Air Lease and USA Recycling positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Air Lease position performs unexpectedly, USA Recycling 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 USA Recycling will offset losses from the drop in USA Recycling's long position.| Air Lease vs. McGrath RentCorp | Air Lease vs. Alta Equipment Group | Air Lease vs. Custom Truck One | Air Lease vs. GATX Corporation |
| USA Recycling vs. Anheuser Busch Inbev | USA Recycling vs. Boyd Gaming | USA Recycling vs. SNDL Inc | USA Recycling vs. Oatly Group AB |
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 Latest Portfolios module to quick portfolio dashboard that showcases your latest portfolios.
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