Correlation Between Air Lease and Japan Asia
Can any of the company-specific risk be diversified away by investing in both Air Lease and Japan Asia 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 Japan Asia into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Air Lease and Japan Asia Investment, you can compare the effects of market volatilities on Air Lease and Japan Asia 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 Japan Asia. Check out your portfolio center. Please also check ongoing floating volatility patterns of Air Lease and Japan Asia.
Diversification Opportunities for Air Lease and Japan Asia
0.33 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Air and Japan is 0.33. Overlapping area represents the amount of risk that can be diversified away by holding Air Lease and Japan Asia Investment in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Japan Asia Investment 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 Japan Asia. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Japan Asia Investment has no effect on the direction of Air Lease i.e., Air Lease and Japan Asia go up and down completely randomly.
Pair Corralation between Air Lease and Japan Asia
Assuming the 90 days trading horizon Air Lease is expected to generate 0.56 times more return on investment than Japan Asia. However, Air Lease is 1.77 times less risky than Japan Asia. It trades about 0.05 of its potential returns per unit of risk. Japan Asia Investment is currently generating about 0.0 per unit of risk. If you would invest 3,314 in Air Lease on September 12, 2024 and sell it today you would earn a total of 1,426 from holding Air Lease or generate 43.03% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Air Lease vs. Japan Asia Investment
Performance |
| Timeline |
| Air Lease |
| Japan Asia Investment |
Air Lease and Japan Asia Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Air Lease and Japan Asia
The main advantage of trading using opposite Air Lease and Japan Asia positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Air Lease position performs unexpectedly, Japan Asia 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 Japan Asia will offset losses from the drop in Japan Asia's long position.| Air Lease vs. United Rentals | Air Lease vs. WillScot Mobile Mini | Air Lease vs. Superior Plus Corp | Air Lease vs. SIVERS SEMICONDUCTORS AB |
| Japan Asia vs. Ameriprise Financial | Japan Asia vs. Ares Management Corp | Japan Asia vs. Superior Plus Corp | Japan Asia vs. SIVERS SEMICONDUCTORS AB |
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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.
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