Correlation Between Ep Emerging and Air Lease
Can any of the company-specific risk be diversified away by investing in both Ep Emerging 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 Ep Emerging and Air Lease into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Ep Emerging Markets and Air Lease, you can compare the effects of market volatilities on Ep Emerging 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 Ep Emerging with a short position of Air Lease. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ep Emerging and Air Lease.
Diversification Opportunities for Ep Emerging and Air Lease
-0.2 | Correlation Coefficient |
Good diversification
The 3 months correlation between EPASX and Air is -0.2. Overlapping area represents the amount of risk that can be diversified away by holding Ep Emerging Markets and Air Lease in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Air Lease and Ep Emerging 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 Ep Emerging Markets 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 Ep Emerging i.e., Ep Emerging and Air Lease go up and down completely randomly.
Pair Corralation between Ep Emerging and Air Lease
Assuming the 90 days horizon Ep Emerging is expected to generate 4.74 times less return on investment than Air Lease. But when comparing it to its historical volatility, Ep Emerging Markets is 2.31 times less risky than Air Lease. It trades about 0.02 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 3,758 in Air Lease on August 23, 2024 and sell it today you would earn a total of 1,188 from holding Air Lease or generate 31.61% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 99.8% |
| Values | Daily Returns |
Ep Emerging Markets vs. Air Lease
Performance |
| Timeline |
| Ep Emerging Markets |
| Air Lease |
Ep Emerging and Air Lease Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ep Emerging and Air Lease
The main advantage of trading using opposite Ep Emerging and Air Lease positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ep Emerging 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.| Ep Emerging vs. Vanguard Emerging Markets | Ep Emerging vs. Vanguard Emerging Markets | Ep Emerging vs. Vanguard Emerging Markets | Ep Emerging vs. HUMANA INC |
| 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 Portfolio Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.
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