Correlation Between Air Lease and SBA Communications
Can any of the company-specific risk be diversified away by investing in both Air Lease and SBA Communications 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 SBA Communications into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Air Lease and SBA Communications Corp, you can compare the effects of market volatilities on Air Lease and SBA Communications 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 SBA Communications. Check out your portfolio center. Please also check ongoing floating volatility patterns of Air Lease and SBA Communications.
Diversification Opportunities for Air Lease and SBA Communications
-0.26 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Air and SBA is -0.26. Overlapping area represents the amount of risk that can be diversified away by holding Air Lease and SBA Communications Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SBA Communications Corp 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 SBA Communications. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SBA Communications Corp has no effect on the direction of Air Lease i.e., Air Lease and SBA Communications go up and down completely randomly.
Pair Corralation between Air Lease and SBA Communications
Assuming the 90 days trading horizon Air Lease is expected to generate 4.88 times less return on investment than SBA Communications. In addition to that, Air Lease is 1.24 times more volatile than SBA Communications Corp. It trades about 0.01 of its total potential returns per unit of risk. SBA Communications Corp is currently generating about 0.09 per unit of volatility. If you would invest 17,625 in SBA Communications Corp on September 3, 2024 and sell it today you would earn a total of 3,955 from holding SBA Communications Corp or generate 22.44% 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. SBA Communications Corp
Performance |
| Timeline |
| Air Lease |
| SBA Communications Corp |
Air Lease and SBA Communications Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Air Lease and SBA Communications
The main advantage of trading using opposite Air Lease and SBA Communications positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Air Lease position performs unexpectedly, SBA Communications 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 SBA Communications will offset losses from the drop in SBA Communications' long position.| Air Lease vs. Air Transport Services | Air Lease vs. VIRGIN WINES UK | Air Lease vs. TEXAS ROADHOUSE | Air Lease vs. Broadcom |
| SBA Communications vs. Luckin Coffee | SBA Communications vs. REVO INSURANCE SPA | SBA Communications vs. Selective Insurance Group | SBA Communications vs. Goosehead Insurance |
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 Bond Analysis module to evaluate and analyze corporate bonds as a potential investment for your portfolios..
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