Correlation Between Air Lease and T-Mobile
Can any of the company-specific risk be diversified away by investing in both Air Lease and T-Mobile 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 T-Mobile into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Air Lease and T Mobile, you can compare the effects of market volatilities on Air Lease and T-Mobile 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 T-Mobile. Check out your portfolio center. Please also check ongoing floating volatility patterns of Air Lease and T-Mobile.
Diversification Opportunities for Air Lease and T-Mobile
Poor diversification
The 3 months correlation between Air and T-Mobile is 0.62. Overlapping area represents the amount of risk that can be diversified away by holding Air Lease and T Mobile in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on T Mobile 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 T-Mobile. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of T Mobile has no effect on the direction of Air Lease i.e., Air Lease and T-Mobile go up and down completely randomly.
Pair Corralation between Air Lease and T-Mobile
Assuming the 90 days trading horizon Air Lease is expected to under-perform the T-Mobile. But the stock apears to be less risky and, when comparing its historical volatility, Air Lease is 1.23 times less risky than T-Mobile. The stock trades about -0.09 of its potential returns per unit of risk. The T Mobile is currently generating about 0.3 of returns per unit of risk over similar time horizon. If you would invest 20,305 in T Mobile on November 7, 2024 and sell it today you would earn a total of 2,380 from holding T Mobile or generate 11.72% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Air Lease vs. T Mobile
Performance |
| Timeline |
| Air Lease |
| T Mobile |
Air Lease and T-Mobile Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Air Lease and T-Mobile
The main advantage of trading using opposite Air Lease and T-Mobile positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Air Lease position performs unexpectedly, T-Mobile 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 T-Mobile will offset losses from the drop in T-Mobile's long position.| Air Lease vs. United Rentals | Air Lease vs. Ashtead Group plc | Air Lease vs. AMERCO | Air Lease vs. WillScot Mobile Mini |
| T-Mobile vs. BANKINTER ADR 2007 | T-Mobile vs. REVO INSURANCE SPA | T-Mobile vs. The Boston Beer | T-Mobile vs. CHIBA BANK |
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 Companies Directory module to evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals.
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