Correlation Between Apple and AerCap Holdings
Can any of the company-specific risk be diversified away by investing in both Apple and AerCap Holdings 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 Apple and AerCap Holdings into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Apple Inc and AerCap Holdings NV, you can compare the effects of market volatilities on Apple and AerCap Holdings 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 Apple with a short position of AerCap Holdings. Check out your portfolio center. Please also check ongoing floating volatility patterns of Apple and AerCap Holdings.
Diversification Opportunities for Apple and AerCap Holdings
0.8 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Apple and AerCap is 0.8. Overlapping area represents the amount of risk that can be diversified away by holding Apple Inc and AerCap Holdings NV in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AerCap Holdings NV and Apple 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 Apple Inc are associated (or correlated) with AerCap Holdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of AerCap Holdings NV has no effect on the direction of Apple i.e., Apple and AerCap Holdings go up and down completely randomly.
Pair Corralation between Apple and AerCap Holdings
Assuming the 90 days trading horizon Apple is expected to generate 1.7 times less return on investment than AerCap Holdings. But when comparing it to its historical volatility, Apple Inc is 1.01 times less risky than AerCap Holdings. It trades about 0.06 of its potential returns per unit of risk. AerCap Holdings NV is currently generating about 0.1 of returns per unit of risk over similar time horizon. If you would invest 5,452 in AerCap Holdings NV on September 1, 2024 and sell it today you would earn a total of 3,758 from holding AerCap Holdings NV or generate 68.93% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 99.74% |
| Values | Daily Returns |
Apple Inc vs. AerCap Holdings NV
Performance |
| Timeline |
| Apple Inc |
| AerCap Holdings NV |
Apple and AerCap Holdings Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Apple and AerCap Holdings
The main advantage of trading using opposite Apple and AerCap Holdings positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Apple position performs unexpectedly, AerCap Holdings 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 AerCap Holdings will offset losses from the drop in AerCap Holdings' long position.| Apple vs. Sumitomo Rubber Industries | Apple vs. Rayonier Advanced Materials | Apple vs. EAGLE MATERIALS | Apple vs. NEWELL RUBBERMAID |
| AerCap Holdings vs. PT Bank Maybank | AerCap Holdings vs. LION ONE METALS | AerCap Holdings vs. CDN IMPERIAL BANK | AerCap Holdings vs. Chiba Bank |
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 Stock Tickers module to use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites.
Other Complementary Tools
| Money Flow Index Determine momentum by analyzing Money Flow Index and other technical indicators | |
| Premium Stories Follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope | |
| Portfolio Rebalancing Analyze risk-adjusted returns against different time horizons to find asset-allocation targets | |
| Portfolio Holdings Check your current holdings and cash postion to detemine if your portfolio needs rebalancing | |
| Idea Analyzer Analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas |