Correlation Between Hasbro and Air Lease
Can any of the company-specific risk be diversified away by investing in both Hasbro 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 Hasbro and Air Lease into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Hasbro Inc and Air Lease, you can compare the effects of market volatilities on Hasbro 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 Hasbro with a short position of Air Lease. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hasbro and Air Lease.
Diversification Opportunities for Hasbro and Air Lease
Excellent diversification
The 3 months correlation between Hasbro and Air is -0.64. Overlapping area represents the amount of risk that can be diversified away by holding Hasbro Inc and Air Lease in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Air Lease and Hasbro 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 Hasbro Inc 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 Hasbro i.e., Hasbro and Air Lease go up and down completely randomly.
Pair Corralation between Hasbro and Air Lease
Considering the 90-day investment horizon Hasbro Inc is expected to generate 0.76 times more return on investment than Air Lease. However, Hasbro Inc is 1.32 times less risky than Air Lease. It trades about 0.07 of its potential returns per unit of risk. Air Lease is currently generating about 0.04 per unit of risk. If you would invest 5,739 in Hasbro Inc on September 1, 2024 and sell it today you would earn a total of 776.00 from holding Hasbro Inc or generate 13.52% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Hasbro Inc vs. Air Lease
Performance |
| Timeline |
| Hasbro Inc |
| Air Lease |
Hasbro and Air Lease Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hasbro and Air Lease
The main advantage of trading using opposite Hasbro and Air Lease positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hasbro 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.The idea behind Hasbro Inc and Air Lease 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.| Air Lease vs. McGrath RentCorp | Air Lease vs. Herc Holdings | Air Lease vs. PROG Holdings | Air Lease vs. Custom Truck One |
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 Equity Search module to search for actively traded equities including funds and ETFs from over 30 global markets.
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