Correlation Between Air Lease and ELEMENT FLEET
Can any of the company-specific risk be diversified away by investing in both Air Lease and ELEMENT FLEET 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 ELEMENT FLEET into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Air Lease and ELEMENT FLEET MGMT, you can compare the effects of market volatilities on Air Lease and ELEMENT FLEET 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 ELEMENT FLEET. Check out your portfolio center. Please also check ongoing floating volatility patterns of Air Lease and ELEMENT FLEET.
Diversification Opportunities for Air Lease and ELEMENT FLEET
0.66 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Air and ELEMENT is 0.66. Overlapping area represents the amount of risk that can be diversified away by holding Air Lease and ELEMENT FLEET MGMT in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ELEMENT FLEET MGMT 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 ELEMENT FLEET. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ELEMENT FLEET MGMT has no effect on the direction of Air Lease i.e., Air Lease and ELEMENT FLEET go up and down completely randomly.
Pair Corralation between Air Lease and ELEMENT FLEET
Assuming the 90 days trading horizon Air Lease is expected to generate 0.77 times more return on investment than ELEMENT FLEET. However, Air Lease is 1.3 times less risky than ELEMENT FLEET. It trades about 0.28 of its potential returns per unit of risk. ELEMENT FLEET MGMT is currently generating about 0.05 per unit of risk. If you would invest 3,920 in Air Lease on September 5, 2024 and sell it today you would earn a total of 880.00 from holding Air Lease or generate 22.45% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Air Lease vs. ELEMENT FLEET MGMT
Performance |
| Timeline |
| Air Lease |
| ELEMENT FLEET MGMT |
Air Lease and ELEMENT FLEET Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Air Lease and ELEMENT FLEET
The main advantage of trading using opposite Air Lease and ELEMENT FLEET positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Air Lease position performs unexpectedly, ELEMENT FLEET 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 ELEMENT FLEET will offset losses from the drop in ELEMENT FLEET's long position.| Air Lease vs. RETAIL FOOD GROUP | Air Lease vs. TYSON FOODS A | Air Lease vs. United Natural Foods | Air Lease vs. Performance Food Group |
| ELEMENT FLEET vs. JD SPORTS FASH | ELEMENT FLEET vs. Live Nation Entertainment | ELEMENT FLEET vs. FUTURE GAMING GRP | ELEMENT FLEET vs. Tencent Music Entertainment |
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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