Correlation Between Air Lease and Longfor Group
Can any of the company-specific risk be diversified away by investing in both Air Lease and Longfor Group 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 Longfor Group into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Air Lease and Longfor Group Holdings, you can compare the effects of market volatilities on Air Lease and Longfor Group 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 Longfor Group. Check out your portfolio center. Please also check ongoing floating volatility patterns of Air Lease and Longfor Group.
Diversification Opportunities for Air Lease and Longfor Group
0.1 | Correlation Coefficient |
Average diversification
The 3 months correlation between Air and Longfor is 0.1. Overlapping area represents the amount of risk that can be diversified away by holding Air Lease and Longfor Group Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Longfor Group Holdings 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 Longfor Group. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Longfor Group Holdings has no effect on the direction of Air Lease i.e., Air Lease and Longfor Group go up and down completely randomly.
Pair Corralation between Air Lease and Longfor Group
Assuming the 90 days trading horizon Air Lease is expected to generate 2.67 times less return on investment than Longfor Group. But when comparing it to its historical volatility, Air Lease is 3.18 times less risky than Longfor Group. It trades about 0.05 of its potential returns per unit of risk. Longfor Group Holdings is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest 119.00 in Longfor Group Holdings on September 3, 2024 and sell it today you would earn a total of 11.00 from holding Longfor Group Holdings or generate 9.24% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Air Lease vs. Longfor Group Holdings
Performance |
| Timeline |
| Air Lease |
| Longfor Group Holdings |
Air Lease and Longfor Group Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Air Lease and Longfor Group
The main advantage of trading using opposite Air Lease and Longfor Group positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Air Lease position performs unexpectedly, Longfor Group 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 Longfor Group will offset losses from the drop in Longfor Group's long position.| Air Lease vs. Air Transport Services | Air Lease vs. VIRGIN WINES UK | Air Lease vs. TEXAS ROADHOUSE | Air Lease vs. Broadcom |
| Longfor Group vs. AUST AGRICULTURAL | Longfor Group vs. Sumitomo Mitsui Construction | Longfor Group vs. Air Lease | Longfor Group vs. Australian Agricultural |
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 Sectors module to list of equity sectors categorizing publicly traded companies based on their primary business activities.
Other Complementary Tools
| Latest Portfolios Quick portfolio dashboard that showcases your latest portfolios | |
| Insider Screener Find insiders across different sectors to evaluate their impact on performance | |
| Options Analysis Analyze and evaluate options and option chains as a potential hedge for your portfolios | |
| Odds Of Bankruptcy Get analysis of equity chance of financial distress in the next 2 years | |
| Economic Indicators Top statistical indicators that provide insights into how an economy is performing |