Correlation Between DAX Index and AerCap Holdings

Specify exactly 2 symbols:
Can any of the company-specific risk be diversified away by investing in both DAX Index and AerCap Holdings 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 DAX Index and AerCap Holdings into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between DAX Index and AerCap Holdings NV, you can compare the effects of market volatilities on DAX Index and AerCap Holdings 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 DAX Index with a short position of AerCap Holdings. Check out your portfolio center. Please also check ongoing floating volatility patterns of DAX Index and AerCap Holdings.

Diversification Opportunities for DAX Index and AerCap Holdings

0.63
  Correlation Coefficient

Poor diversification

The 3 months correlation between DAX and AerCap is 0.63. Overlapping area represents the amount of risk that can be diversified away by holding DAX Index and AerCap Holdings NV in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AerCap Holdings NV and DAX Index 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 DAX Index are associated (or correlated) with AerCap Holdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of AerCap Holdings NV has no effect on the direction of DAX Index i.e., DAX Index and AerCap Holdings go up and down completely randomly.
    Optimize

Pair Corralation between DAX Index and AerCap Holdings

Assuming the 90 days trading horizon DAX Index is expected to generate 2.66 times less return on investment than AerCap Holdings. But when comparing it to its historical volatility, DAX Index is 1.95 times less risky than AerCap Holdings. It trades about 0.08 of its potential returns per unit of risk. AerCap Holdings NV is currently generating about 0.1 of returns per unit of risk over similar time horizon. If you would invest  5,502  in AerCap Holdings NV on August 31, 2024 and sell it today you would earn a total of  3,858  from holding AerCap Holdings NV or generate 70.12% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthSignificant
Accuracy99.74%
ValuesDaily Returns

DAX Index  vs.  AerCap Holdings NV

 Performance 
       Timeline  

DAX Index and AerCap Holdings Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with DAX Index and AerCap Holdings

The main advantage of trading using opposite DAX Index and AerCap Holdings positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if DAX Index position performs unexpectedly, AerCap Holdings 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 AerCap Holdings will offset losses from the drop in AerCap Holdings' long position.
DAX Index vs. Magnachip Semiconductor
DAX Index vs. Taiwan Semiconductor Manufacturing
DAX Index vs. Broadcom
DAX Index vs. MagnaChip Semiconductor Corp
The idea behind DAX Index and AerCap Holdings NV pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.
AerCap Holdings vs. Salesforce
AerCap Holdings vs. Ming Le Sports
AerCap Holdings vs. Transportadora de Gas
AerCap Holdings vs. ANTA SPORTS PRODUCT
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 Premium Stories module to follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope.

Other Complementary Tools

Options Analysis
Analyze and evaluate options and option chains as a potential hedge for your portfolios
AI Portfolio Architect
Use AI to generate optimal portfolios and find profitable investment opportunities
Aroon Oscillator
Analyze current equity momentum using Aroon Oscillator and other momentum ratios
Equity Analysis
Research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities
Bonds Directory
Find actively traded corporate debentures issued by US companies


 
Macroaxis helps investors of all levels and skills to maximize the upside of all their holdings and minimize the risk associated with market volatility, economic swings, and company-specific events. View terms and conditions
 
Feedback Blog
Made with optimal in San Francisco
2024 Macroaxis LLC
COMMON DESTINATIONS
MAIN CATEGORIES
COMPANY