Correlation Between Air Lease and Amazon
Can any of the company-specific risk be diversified away by investing in both Air Lease and Amazon 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 Amazon into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Air Lease and Amazon Inc, you can compare the effects of market volatilities on Air Lease and Amazon 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 Amazon. Check out your portfolio center. Please also check ongoing floating volatility patterns of Air Lease and Amazon.
Diversification Opportunities for Air Lease and Amazon
Very poor diversification
The 3 months correlation between Air and Amazon is 0.81. Overlapping area represents the amount of risk that can be diversified away by holding Air Lease and Amazon Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Amazon Inc 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 Amazon. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Amazon Inc has no effect on the direction of Air Lease i.e., Air Lease and Amazon go up and down completely randomly.
Pair Corralation between Air Lease and Amazon
Assuming the 90 days trading horizon Air Lease is expected to generate 0.91 times more return on investment than Amazon. However, Air Lease is 1.1 times less risky than Amazon. It trades about 0.28 of its potential returns per unit of risk. Amazon Inc is currently generating about 0.22 per unit of risk. If you would invest 4,040 in Air Lease on August 29, 2024 and sell it today you would earn a total of 900.00 from holding Air Lease or generate 22.28% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 97.67% |
| Values | Daily Returns |
Air Lease vs. Amazon Inc
Performance |
| Timeline |
| Air Lease |
| Amazon Inc |
Air Lease and Amazon Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Air Lease and Amazon
The main advantage of trading using opposite Air Lease and Amazon positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Air Lease position performs unexpectedly, Amazon 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 Amazon will offset losses from the drop in Amazon's long position.| Air Lease vs. WillScot Mobile Mini | Air Lease vs. Superior Plus Corp | Air Lease vs. SIVERS SEMICONDUCTORS AB | Air Lease vs. Talanx AG |
| Amazon vs. ALBIS LEASING AG | Amazon vs. Silicon Motion Technology | Amazon vs. TERADATA | Amazon vs. Air Lease |
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 USA ETFs module to find actively traded Exchange Traded Funds (ETF) in USA.
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