Correlation Between Air Lease and Gaming
Can any of the company-specific risk be diversified away by investing in both Air Lease and Gaming 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 Gaming into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Air Lease and Gaming and Leisure, you can compare the effects of market volatilities on Air Lease and Gaming 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 Gaming. Check out your portfolio center. Please also check ongoing floating volatility patterns of Air Lease and Gaming.
Diversification Opportunities for Air Lease and Gaming
Very weak diversification
The 3 months correlation between Air and Gaming is 0.56. Overlapping area represents the amount of risk that can be diversified away by holding Air Lease and Gaming and Leisure in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Gaming and Leisure 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 Gaming. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Gaming and Leisure has no effect on the direction of Air Lease i.e., Air Lease and Gaming go up and down completely randomly.
Pair Corralation between Air Lease and Gaming
Assuming the 90 days trading horizon Air Lease is expected to under-perform the Gaming. But the stock apears to be less risky and, when comparing its historical volatility, Air Lease is 1.31 times less risky than Gaming. The stock trades about -0.13 of its potential returns per unit of risk. The Gaming and Leisure is currently generating about -0.01 of returns per unit of risk over similar time horizon. If you would invest 4,628 in Gaming and Leisure on November 3, 2024 and sell it today you would lose (37.00) from holding Gaming and Leisure or give up 0.8% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Air Lease vs. Gaming and Leisure
Performance |
| Timeline |
| Air Lease |
| Gaming and Leisure |
Air Lease and Gaming Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Air Lease and Gaming
The main advantage of trading using opposite Air Lease and Gaming positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Air Lease position performs unexpectedly, Gaming 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 Gaming will offset losses from the drop in Gaming's long position.| Air Lease vs. Acadia Healthcare | Air Lease vs. EPSILON HEALTHCARE LTD | Air Lease vs. Universal Health Realty | Air Lease vs. Ares Management Corp |
| Gaming vs. Yuexiu Transport Infrastructure | Gaming vs. ALERION CLEANPOWER | Gaming vs. Verizon Communications | Gaming vs. Highlight Communications AG |
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 Competition Analyzer module to analyze and compare many basic indicators for a group of related or unrelated entities.
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