Correlation Between Broadstone Net and AerCap Holdings
Can any of the company-specific risk be diversified away by investing in both Broadstone Net and AerCap Holdings 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 Broadstone Net and AerCap Holdings into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Broadstone Net Lease and AerCap Holdings NV, you can compare the effects of market volatilities on Broadstone Net and AerCap Holdings 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 Broadstone Net with a short position of AerCap Holdings. Check out your portfolio center. Please also check ongoing floating volatility patterns of Broadstone Net and AerCap Holdings.
Diversification Opportunities for Broadstone Net and AerCap Holdings
-0.06 | Correlation Coefficient |
Good diversification
The 3 months correlation between Broadstone and AerCap is -0.06. Overlapping area represents the amount of risk that can be diversified away by holding Broadstone Net Lease and AerCap Holdings NV in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AerCap Holdings NV and Broadstone Net 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 Broadstone Net Lease are associated (or correlated) with AerCap Holdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of AerCap Holdings NV has no effect on the direction of Broadstone Net i.e., Broadstone Net and AerCap Holdings go up and down completely randomly.
Pair Corralation between Broadstone Net and AerCap Holdings
Considering the 90-day investment horizon Broadstone Net Lease is expected to under-perform the AerCap Holdings. But the stock apears to be less risky and, when comparing its historical volatility, Broadstone Net Lease is 1.3 times less risky than AerCap Holdings. The stock trades about -0.17 of its potential returns per unit of risk. The AerCap Holdings NV is currently generating about 0.14 of returns per unit of risk over similar time horizon. If you would invest 9,584 in AerCap Holdings NV on August 28, 2024 and sell it today you would earn a total of 385.00 from holding AerCap Holdings NV or generate 4.02% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Broadstone Net Lease vs. AerCap Holdings NV
Performance |
| Timeline |
| Broadstone Net Lease |
| AerCap Holdings NV |
Broadstone Net and AerCap Holdings Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Broadstone Net and AerCap Holdings
The main advantage of trading using opposite Broadstone Net and AerCap Holdings positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Broadstone Net position performs unexpectedly, AerCap Holdings 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 AerCap Holdings will offset losses from the drop in AerCap Holdings' long position.| Broadstone Net vs. Armada Hflr Pr | Broadstone Net vs. Brightspire Capital | Broadstone Net vs. Safehold | Broadstone Net vs. Essential Properties Realty |
| AerCap Holdings vs. Ryder System | AerCap Holdings vs. Alta Equipment Group | AerCap Holdings vs. PROG Holdings | AerCap Holdings vs. GATX Corporation |
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 USA ETFs module to find actively traded Exchange Traded Funds (ETF) in USA.
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