Correlation Between Air Lease and Apple
Can any of the company-specific risk be diversified away by investing in both Air Lease and Apple 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 Apple into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Air Lease and Apple Inc, you can compare the effects of market volatilities on Air Lease and Apple 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 Apple. Check out your portfolio center. Please also check ongoing floating volatility patterns of Air Lease and Apple.
Diversification Opportunities for Air Lease and Apple
Poor diversification
The 3 months correlation between Air and Apple is 0.65. Overlapping area represents the amount of risk that can be diversified away by holding Air Lease and Apple Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Apple 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 Apple. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Apple Inc has no effect on the direction of Air Lease i.e., Air Lease and Apple go up and down completely randomly.
Pair Corralation between Air Lease and Apple
Assuming the 90 days trading horizon Air Lease is expected to generate 0.87 times more return on investment than Apple. However, Air Lease is 1.16 times less risky than Apple. It trades about -0.13 of its potential returns per unit of risk. Apple Inc is currently generating about -0.45 per unit of risk. If you would invest 4,660 in Air Lease on October 25, 2024 and sell it today you would lose (160.00) from holding Air Lease or give up 3.43% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Air Lease vs. Apple Inc
Performance |
| Timeline |
| Air Lease |
| Apple Inc |
Air Lease and Apple Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Air Lease and Apple
The main advantage of trading using opposite Air Lease and Apple positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Air Lease position performs unexpectedly, Apple 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 Apple will offset losses from the drop in Apple's long position.| Air Lease vs. United Rentals | Air Lease vs. WillScot Mobile Mini | Air Lease vs. Avis Budget Group | Air Lease vs. ALD SA |
| Apple vs. Global Ship Lease | Apple vs. Air Lease | Apple vs. SCANSOURCE | Apple vs. GRENKELEASING Dusseldorf |
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 CEOs Directory module to screen CEOs from public companies around the world.
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