Correlation Between Air Transport and Air Lease
Can any of the company-specific risk be diversified away by investing in both Air Transport and Air Lease 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 Transport and Air Lease into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Air Transport Services and Air Lease, you can compare the effects of market volatilities on Air Transport and Air Lease 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 Transport with a short position of Air Lease. Check out your portfolio center. Please also check ongoing floating volatility patterns of Air Transport and Air Lease.
Diversification Opportunities for Air Transport and Air Lease
0.91 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Air and Air is 0.91. Overlapping area represents the amount of risk that can be diversified away by holding Air Transport Services and Air Lease in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Air Lease and Air Transport 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 Transport Services are associated (or correlated) with Air Lease. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Air Lease has no effect on the direction of Air Transport i.e., Air Transport and Air Lease go up and down completely randomly.
Pair Corralation between Air Transport and Air Lease
Assuming the 90 days horizon Air Transport Services is expected to generate 2.35 times more return on investment than Air Lease. However, Air Transport is 2.35 times more volatile than Air Lease. It trades about 0.14 of its potential returns per unit of risk. Air Lease is currently generating about 0.19 per unit of risk. If you would invest 1,520 in Air Transport Services on September 3, 2024 and sell it today you would earn a total of 560.00 from holding Air Transport Services or generate 36.84% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Air Transport Services vs. Air Lease
Performance |
| Timeline |
| Air Transport Services |
| Air Lease |
Air Transport and Air Lease Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Air Transport and Air Lease
The main advantage of trading using opposite Air Transport and Air Lease positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Air Transport position performs unexpectedly, Air Lease 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 Air Lease will offset losses from the drop in Air Lease's long position.| Air Transport vs. Computershare Limited | Air Transport vs. Ribbon Communications | Air Transport vs. Axcelis Technologies | Air Transport vs. Playtech plc |
| Air Lease vs. Air Transport Services | Air Lease vs. VIRGIN WINES UK | Air Lease vs. TEXAS ROADHOUSE | Air Lease vs. Broadcom |
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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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