Correlation Between Air Lease and LION ONE
Can any of the company-specific risk be diversified away by investing in both Air Lease and LION ONE 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 LION ONE into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Air Lease and LION ONE METALS, you can compare the effects of market volatilities on Air Lease and LION ONE 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 LION ONE. Check out your portfolio center. Please also check ongoing floating volatility patterns of Air Lease and LION ONE.
Diversification Opportunities for Air Lease and LION ONE
Good diversification
The 3 months correlation between Air and LION is -0.16. Overlapping area represents the amount of risk that can be diversified away by holding Air Lease and LION ONE METALS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on LION ONE METALS 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 LION ONE. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of LION ONE METALS has no effect on the direction of Air Lease i.e., Air Lease and LION ONE go up and down completely randomly.
Pair Corralation between Air Lease and LION ONE
Assuming the 90 days trading horizon Air Lease is expected to generate 0.45 times more return on investment than LION ONE. However, Air Lease is 2.24 times less risky than LION ONE. It trades about 0.03 of its potential returns per unit of risk. LION ONE METALS is currently generating about -0.04 per unit of risk. If you would invest 3,892 in Air Lease on September 1, 2024 and sell it today you would earn a total of 868.00 from holding Air Lease or generate 22.3% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Air Lease vs. LION ONE METALS
Performance |
| Timeline |
| Air Lease |
| LION ONE METALS |
Air Lease and LION ONE Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Air Lease and LION ONE
The main advantage of trading using opposite Air Lease and LION ONE positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Air Lease position performs unexpectedly, LION ONE 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 LION ONE will offset losses from the drop in LION ONE's long position.| Air Lease vs. Caseys General Stores | Air Lease vs. Ping An Insurance | Air Lease vs. Selective Insurance Group | Air Lease vs. The Hanover Insurance |
| LION ONE vs. Corporate Office Properties | LION ONE vs. Eagle Materials | LION ONE vs. Plastic Omnium | LION ONE vs. KENEDIX OFFICE INV |
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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..
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