Correlation Between Air Lease and KAUFMAN ET
Can any of the company-specific risk be diversified away by investing in both Air Lease and KAUFMAN ET 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 KAUFMAN ET into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Air Lease and KAUFMAN ET BROAD, you can compare the effects of market volatilities on Air Lease and KAUFMAN ET 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 KAUFMAN ET. Check out your portfolio center. Please also check ongoing floating volatility patterns of Air Lease and KAUFMAN ET.
Diversification Opportunities for Air Lease and KAUFMAN ET
0.07 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Air and KAUFMAN is 0.07. Overlapping area represents the amount of risk that can be diversified away by holding Air Lease and KAUFMAN ET BROAD in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on KAUFMAN ET BROAD 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 KAUFMAN ET. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of KAUFMAN ET BROAD has no effect on the direction of Air Lease i.e., Air Lease and KAUFMAN ET go up and down completely randomly.
Pair Corralation between Air Lease and KAUFMAN ET
Assuming the 90 days trading horizon Air Lease is expected to generate 1.54 times more return on investment than KAUFMAN ET. However, Air Lease is 1.54 times more volatile than KAUFMAN ET BROAD. It trades about 0.37 of its potential returns per unit of risk. KAUFMAN ET BROAD is currently generating about -0.31 per unit of risk. If you would invest 4,100 in Air Lease on August 30, 2024 and sell it today you would earn a total of 740.00 from holding Air Lease or generate 18.05% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 95.65% |
| Values | Daily Returns |
Air Lease vs. KAUFMAN ET BROAD
Performance |
| Timeline |
| Air Lease |
| KAUFMAN ET BROAD |
Air Lease and KAUFMAN ET Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Air Lease and KAUFMAN ET
The main advantage of trading using opposite Air Lease and KAUFMAN ET positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Air Lease position performs unexpectedly, KAUFMAN ET 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 KAUFMAN ET will offset losses from the drop in KAUFMAN ET's long position.| Air Lease vs. Superior Plus Corp | Air Lease vs. SIVERS SEMICONDUCTORS AB | Air Lease vs. Talanx AG | Air Lease vs. 2G ENERGY |
| KAUFMAN ET vs. Apple Inc | KAUFMAN ET vs. Apple Inc | KAUFMAN ET vs. Superior Plus Corp | KAUFMAN ET vs. SIVERS SEMICONDUCTORS 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 Portfolio Dashboard module to portfolio dashboard that provides centralized access to all your investments.
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