Correlation Between Air Lease and VIVA WINE
Can any of the company-specific risk be diversified away by investing in both Air Lease and VIVA WINE 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 VIVA WINE into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Air Lease and VIVA WINE GROUP, you can compare the effects of market volatilities on Air Lease and VIVA WINE 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 VIVA WINE. Check out your portfolio center. Please also check ongoing floating volatility patterns of Air Lease and VIVA WINE.
Diversification Opportunities for Air Lease and VIVA WINE
Pay attention - limited upside
The 3 months correlation between Air and VIVA is -0.84. Overlapping area represents the amount of risk that can be diversified away by holding Air Lease and VIVA WINE GROUP in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on VIVA WINE 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 VIVA WINE. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of VIVA WINE GROUP has no effect on the direction of Air Lease i.e., Air Lease and VIVA WINE go up and down completely randomly.
Pair Corralation between Air Lease and VIVA WINE
Assuming the 90 days trading horizon Air Lease is expected to generate 2.89 times less return on investment than VIVA WINE. But when comparing it to its historical volatility, Air Lease is 2.71 times less risky than VIVA WINE. It trades about 0.06 of its potential returns per unit of risk. VIVA WINE GROUP is currently generating about 0.07 of returns per unit of risk over similar time horizon. If you would invest 173.00 in VIVA WINE GROUP on September 12, 2024 and sell it today you would earn a total of 161.00 from holding VIVA WINE GROUP or generate 93.06% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Air Lease vs. VIVA WINE GROUP
Performance |
| Timeline |
| Air Lease |
| VIVA WINE GROUP |
Air Lease and VIVA WINE Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Air Lease and VIVA WINE
The main advantage of trading using opposite Air Lease and VIVA WINE positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Air Lease position performs unexpectedly, VIVA WINE 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 VIVA WINE will offset losses from the drop in VIVA WINE'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 |
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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.
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