Correlation Between Fortress Transp and Air Lease
Can any of the company-specific risk be diversified away by investing in both Fortress Transp 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 Fortress Transp and Air Lease into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Fortress Transp Infra and Air Lease, you can compare the effects of market volatilities on Fortress Transp 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 Fortress Transp with a short position of Air Lease. Check out your portfolio center. Please also check ongoing floating volatility patterns of Fortress Transp and Air Lease.
Diversification Opportunities for Fortress Transp and Air Lease
0.73 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Fortress and Air is 0.73. Overlapping area represents the amount of risk that can be diversified away by holding Fortress Transp Infra and Air Lease in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Air Lease and Fortress Transp 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 Fortress Transp Infra 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 Fortress Transp i.e., Fortress Transp and Air Lease go up and down completely randomly.
Pair Corralation between Fortress Transp and Air Lease
Given the investment horizon of 90 days Fortress Transp Infra is expected to generate 1.95 times more return on investment than Air Lease. However, Fortress Transp is 1.95 times more volatile than Air Lease. It trades about 0.27 of its potential returns per unit of risk. Air Lease is currently generating about 0.34 per unit of risk. If you would invest 14,397 in Fortress Transp Infra on August 26, 2024 and sell it today you would earn a total of 2,974 from holding Fortress Transp Infra or generate 20.66% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Fortress Transp Infra vs. Air Lease
Performance |
| Timeline |
| Fortress Transp Infra |
| Air Lease |
Fortress Transp and Air Lease Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Fortress Transp and Air Lease
The main advantage of trading using opposite Fortress Transp and Air Lease positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Fortress Transp 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.| Fortress Transp vs. McGrath RentCorp | Fortress Transp vs. Custom Truck One | Fortress Transp vs. Herc Holdings | Fortress Transp vs. Alta Equipment Group |
| 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 Stocks Directory module to find actively traded stocks across global markets.
Other Complementary Tools
| Cryptocurrency Center Build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency | |
| Equity Forecasting Use basic forecasting models to generate price predictions and determine price momentum | |
| Portfolio Volatility Check portfolio volatility and analyze historical return density to properly model market risk | |
| Efficient Frontier Plot and analyze your portfolio and positions against risk-return landscape of the market. | |
| Options Analysis Analyze and evaluate options and option chains as a potential hedge for your portfolios |