Correlation Between Esprinet SpA and Air Lease
Can any of the company-specific risk be diversified away by investing in both Esprinet SpA 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 Esprinet SpA and Air Lease into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Esprinet SpA and Air Lease, you can compare the effects of market volatilities on Esprinet SpA 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 Esprinet SpA with a short position of Air Lease. Check out your portfolio center. Please also check ongoing floating volatility patterns of Esprinet SpA and Air Lease.
Diversification Opportunities for Esprinet SpA and Air Lease
-0.79 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Esprinet and Air is -0.79. Overlapping area represents the amount of risk that can be diversified away by holding Esprinet SpA and Air Lease in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Air Lease and Esprinet SpA 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 Esprinet SpA 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 Esprinet SpA i.e., Esprinet SpA and Air Lease go up and down completely randomly.
Pair Corralation between Esprinet SpA and Air Lease
Assuming the 90 days trading horizon Esprinet SpA is expected to under-perform the Air Lease. In addition to that, Esprinet SpA is 1.46 times more volatile than Air Lease. It trades about -0.24 of its total potential returns per unit of risk. Air Lease is currently generating about -0.29 per unit of volatility. If you would invest 4,680 in Air Lease on October 17, 2024 and sell it today you would lose (300.00) from holding Air Lease or give up 6.41% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Esprinet SpA vs. Air Lease
Performance |
| Timeline |
| Esprinet SpA |
| Air Lease |
Esprinet SpA and Air Lease Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Esprinet SpA and Air Lease
The main advantage of trading using opposite Esprinet SpA and Air Lease positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Esprinet SpA 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.| Esprinet SpA vs. Australian Agricultural | Esprinet SpA vs. Penta Ocean Construction Co | Esprinet SpA vs. Daito Trust Construction | Esprinet SpA vs. WIMFARM SA EO |
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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 Portfolio Comparator module to compare the composition, asset allocations and performance of any two portfolios in your account.
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