Correlation Between First Ship and Air Lease
Can any of the company-specific risk be diversified away by investing in both First Ship 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 First Ship and Air Lease into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between First Ship Lease and Air Lease, you can compare the effects of market volatilities on First Ship 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 First Ship with a short position of Air Lease. Check out your portfolio center. Please also check ongoing floating volatility patterns of First Ship and Air Lease.
Diversification Opportunities for First Ship and Air Lease
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between First and Air is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding First Ship Lease and Air Lease in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Air Lease and First Ship 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 First Ship 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 First Ship i.e., First Ship and Air Lease go up and down completely randomly.
Pair Corralation between First Ship and Air Lease
Assuming the 90 days horizon First Ship Lease is expected to generate 1.51 times more return on investment than Air Lease. However, First Ship is 1.51 times more volatile than Air Lease. It trades about 0.04 of its potential returns per unit of risk. Air Lease is currently generating about 0.04 per unit of risk. If you would invest 2.50 in First Ship Lease on August 27, 2024 and sell it today you would earn a total of 1.50 from holding First Ship Lease or generate 60.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
First Ship Lease vs. Air Lease
Performance |
| Timeline |
| First Ship Lease |
| Air Lease |
First Ship and Air Lease Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with First Ship and Air Lease
The main advantage of trading using opposite First Ship and Air Lease positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if First Ship 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.| First Ship vs. United Rentals | First Ship vs. AerCap Holdings NV | First Ship vs. Fortress Transp Infra | First Ship vs. U Haul Holding |
| 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 Dashboard module to portfolio dashboard that provides centralized access to all your investments.
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