Correlation Between Air Lease and Rite Aid
Can any of the company-specific risk be diversified away by investing in both Air Lease and Rite Aid 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 Rite Aid into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Air Lease and Rite Aid, you can compare the effects of market volatilities on Air Lease and Rite Aid 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 Rite Aid. Check out your portfolio center. Please also check ongoing floating volatility patterns of Air Lease and Rite Aid.
Diversification Opportunities for Air Lease and Rite Aid
Pay attention - limited upside
The 3 months correlation between Air and Rite is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Air Lease and Rite Aid in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Rite Aid 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 Rite Aid. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Rite Aid has no effect on the direction of Air Lease i.e., Air Lease and Rite Aid go up and down completely randomly.
Pair Corralation between Air Lease and Rite Aid
Assuming the 90 days trading horizon Air Lease is expected to generate 0.25 times more return on investment than Rite Aid. However, Air Lease is 4.07 times less risky than Rite Aid. It trades about 0.05 of its potential returns per unit of risk. Rite Aid is currently generating about -0.04 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 | Flat |
| Strength | Insignificant |
| Accuracy | 99.8% |
| Values | Daily Returns |
Air Lease vs. Rite Aid
Performance |
| Timeline |
| Air Lease |
| Rite Aid |
Air Lease and Rite Aid Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Air Lease and Rite Aid
The main advantage of trading using opposite Air Lease and Rite Aid positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Air Lease position performs unexpectedly, Rite Aid 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 Rite Aid will offset losses from the drop in Rite Aid'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 |
| Rite Aid vs. Sixt Leasing SE | Rite Aid vs. Live Nation Entertainment | Rite Aid vs. CNVISION MEDIA | Rite Aid vs. Air Lease |
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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.
Other Complementary Tools
| Portfolio Center All portfolio management and optimization tools to improve performance of your portfolios | |
| Portfolio Analyzer Portfolio analysis module that provides access to portfolio diagnostics and optimization engine | |
| Insider Screener Find insiders across different sectors to evaluate their impact on performance | |
| Aroon Oscillator Analyze current equity momentum using Aroon Oscillator and other momentum ratios | |
| Correlation Analysis Reduce portfolio risk simply by holding instruments which are not perfectly correlated |