Correlation Between Broadstone Net and Air Lease
Can any of the company-specific risk be diversified away by investing in both Broadstone Net 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 Broadstone Net and Air Lease 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 Air Lease, you can compare the effects of market volatilities on Broadstone Net 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 Broadstone Net with a short position of Air Lease. Check out your portfolio center. Please also check ongoing floating volatility patterns of Broadstone Net and Air Lease.
Diversification Opportunities for Broadstone Net and Air Lease
-0.64 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Broadstone and Air is -0.64. Overlapping area represents the amount of risk that can be diversified away by holding Broadstone Net Lease and Air Lease in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Air Lease 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 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 Broadstone Net i.e., Broadstone Net and Air Lease go up and down completely randomly.
Pair Corralation between Broadstone Net and Air Lease
Considering the 90-day investment horizon Broadstone Net is expected to generate 1.95 times less return on investment than Air Lease. But when comparing it to its historical volatility, Broadstone Net Lease is 1.25 times less risky than Air Lease. It trades about 0.03 of its potential returns per unit of risk. Air Lease is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest 3,694 in Air Lease on August 27, 2024 and sell it today you would earn a total of 1,370 from holding Air Lease or generate 37.09% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Broadstone Net Lease vs. Air Lease
Performance |
| Timeline |
| Broadstone Net Lease |
| Air Lease |
Broadstone Net and Air Lease Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Broadstone Net and Air Lease
The main advantage of trading using opposite Broadstone Net and Air Lease positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Broadstone Net 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.| Broadstone Net vs. Armada Hflr Pr | Broadstone Net vs. Brightspire Capital | Broadstone Net vs. Safehold | Broadstone Net vs. Essential Properties Realty |
| Air Lease vs. Alta Equipment Group | Air Lease vs. McGrath RentCorp | Air Lease vs. Herc Holdings | Air Lease vs. HE Equipment Services |
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 Headlines Timeline module to stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity.
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