Correlation Between Air Lease and SOFI TECHNOLOGIES
Can any of the company-specific risk be diversified away by investing in both Air Lease and SOFI TECHNOLOGIES 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 SOFI TECHNOLOGIES into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Air Lease and SOFI TECHNOLOGIES, you can compare the effects of market volatilities on Air Lease and SOFI TECHNOLOGIES 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 SOFI TECHNOLOGIES. Check out your portfolio center. Please also check ongoing floating volatility patterns of Air Lease and SOFI TECHNOLOGIES.
Diversification Opportunities for Air Lease and SOFI TECHNOLOGIES
0.96 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Air and SOFI is 0.96. Overlapping area represents the amount of risk that can be diversified away by holding Air Lease and SOFI TECHNOLOGIES in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SOFI TECHNOLOGIES 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 SOFI TECHNOLOGIES. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SOFI TECHNOLOGIES has no effect on the direction of Air Lease i.e., Air Lease and SOFI TECHNOLOGIES go up and down completely randomly.
Pair Corralation between Air Lease and SOFI TECHNOLOGIES
Assuming the 90 days trading horizon Air Lease is expected to under-perform the SOFI TECHNOLOGIES. But the stock apears to be less risky and, when comparing its historical volatility, Air Lease is 3.56 times less risky than SOFI TECHNOLOGIES. The stock trades about -0.14 of its potential returns per unit of risk. The SOFI TECHNOLOGIES is currently generating about -0.04 of returns per unit of risk over similar time horizon. If you would invest 1,485 in SOFI TECHNOLOGIES on October 11, 2024 and sell it today you would lose (48.00) from holding SOFI TECHNOLOGIES or give up 3.23% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Air Lease vs. SOFI TECHNOLOGIES
Performance |
| Timeline |
| Air Lease |
| SOFI TECHNOLOGIES |
Air Lease and SOFI TECHNOLOGIES Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Air Lease and SOFI TECHNOLOGIES
The main advantage of trading using opposite Air Lease and SOFI TECHNOLOGIES positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Air Lease position performs unexpectedly, SOFI TECHNOLOGIES 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 SOFI TECHNOLOGIES will offset losses from the drop in SOFI TECHNOLOGIES's long position.| Air Lease vs. United Insurance Holdings | Air Lease vs. Vienna Insurance Group | Air Lease vs. ePlay Digital | Air Lease vs. ZURICH INSURANCE GROUP |
| SOFI TECHNOLOGIES vs. UNITED RENTALS | SOFI TECHNOLOGIES vs. Air Lease | SOFI TECHNOLOGIES vs. WILLIS LEASE FIN | SOFI TECHNOLOGIES vs. CHRYSALIS INVESTMENTS LTD |
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 Equity Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.
Other Complementary Tools
| Equity Forecasting Use basic forecasting models to generate price predictions and determine price momentum | |
| Idea Breakdown Analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes | |
| Fundamental Analysis View fundamental data based on most recent published financial statements | |
| Commodity Channel Use Commodity Channel Index to analyze current equity momentum | |
| Theme Ratings Determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance |