Correlation Between Air Lease and Sany Heavy
Can any of the company-specific risk be diversified away by investing in both Air Lease and Sany Heavy 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 Sany Heavy into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Air Lease and Sany Heavy Equipment, you can compare the effects of market volatilities on Air Lease and Sany Heavy 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 Sany Heavy. Check out your portfolio center. Please also check ongoing floating volatility patterns of Air Lease and Sany Heavy.
Diversification Opportunities for Air Lease and Sany Heavy
0.11 | Correlation Coefficient |
Average diversification
The 3 months correlation between Air and Sany is 0.11. Overlapping area represents the amount of risk that can be diversified away by holding Air Lease and Sany Heavy Equipment in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sany Heavy Equipment 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 Sany Heavy. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sany Heavy Equipment has no effect on the direction of Air Lease i.e., Air Lease and Sany Heavy go up and down completely randomly.
Pair Corralation between Air Lease and Sany Heavy
Assuming the 90 days trading horizon Air Lease is expected to generate 0.62 times more return on investment than Sany Heavy. However, Air Lease is 1.61 times less risky than Sany Heavy. It trades about 0.37 of its potential returns per unit of risk. Sany Heavy Equipment is currently generating about 0.04 per unit of risk. If you would invest 4,060 in Air Lease on September 4, 2024 and sell it today you would earn a total of 700.00 from holding Air Lease or generate 17.24% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 95.45% |
| Values | Daily Returns |
Air Lease vs. Sany Heavy Equipment
Performance |
| Timeline |
| Air Lease |
| Sany Heavy Equipment |
Air Lease and Sany Heavy Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Air Lease and Sany Heavy
The main advantage of trading using opposite Air Lease and Sany Heavy positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Air Lease position performs unexpectedly, Sany Heavy 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 Sany Heavy will offset losses from the drop in Sany Heavy's long position.The idea behind Air Lease and Sany Heavy Equipment pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.| Sany Heavy vs. Komatsu | Sany Heavy vs. CNH Industrial NV | Sany Heavy vs. KUBOTA P ADR20 | Sany Heavy vs. Hitachi Construction Machinery |
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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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