Correlation Between Air Lease and CHINA EDUCATION
Can any of the company-specific risk be diversified away by investing in both Air Lease and CHINA EDUCATION 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 CHINA EDUCATION into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Air Lease and CHINA EDUCATION GROUP, you can compare the effects of market volatilities on Air Lease and CHINA EDUCATION 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 CHINA EDUCATION. Check out your portfolio center. Please also check ongoing floating volatility patterns of Air Lease and CHINA EDUCATION.
Diversification Opportunities for Air Lease and CHINA EDUCATION
-0.65 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Air and CHINA is -0.65. Overlapping area represents the amount of risk that can be diversified away by holding Air Lease and CHINA EDUCATION GROUP in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CHINA EDUCATION GROUP 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 CHINA EDUCATION. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CHINA EDUCATION GROUP has no effect on the direction of Air Lease i.e., Air Lease and CHINA EDUCATION go up and down completely randomly.
Pair Corralation between Air Lease and CHINA EDUCATION
Assuming the 90 days trading horizon Air Lease is expected to under-perform the CHINA EDUCATION. But the stock apears to be less risky and, when comparing its historical volatility, Air Lease is 1.7 times less risky than CHINA EDUCATION. The stock trades about -0.17 of its potential returns per unit of risk. The CHINA EDUCATION GROUP is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest 41.00 in CHINA EDUCATION GROUP on November 3, 2024 and sell it today you would earn a total of 1.00 from holding CHINA EDUCATION GROUP or generate 2.44% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Air Lease vs. CHINA EDUCATION GROUP
Performance |
| Timeline |
| Air Lease |
| CHINA EDUCATION GROUP |
Air Lease and CHINA EDUCATION Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Air Lease and CHINA EDUCATION
The main advantage of trading using opposite Air Lease and CHINA EDUCATION positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Air Lease position performs unexpectedly, CHINA EDUCATION 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 CHINA EDUCATION will offset losses from the drop in CHINA EDUCATION's long position.| Air Lease vs. Jacquet Metal Service | Air Lease vs. Penn National Gaming | Air Lease vs. PLAYMATES TOYS | Air Lease vs. CONTAGIOUS GAMING INC |
| CHINA EDUCATION vs. ONWARD MEDICAL BV | CHINA EDUCATION vs. WESANA HEALTH HOLD | CHINA EDUCATION vs. Siemens Healthineers AG | CHINA EDUCATION vs. CARDINAL HEALTH |
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 Portfolio Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.
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