Correlation Between Healthcare Services and Air Lease
Can any of the company-specific risk be diversified away by investing in both Healthcare Services 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 Healthcare Services and Air Lease into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Healthcare Services Group and Air Lease, you can compare the effects of market volatilities on Healthcare Services 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 Healthcare Services with a short position of Air Lease. Check out your portfolio center. Please also check ongoing floating volatility patterns of Healthcare Services and Air Lease.
Diversification Opportunities for Healthcare Services and Air Lease
0.83 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Healthcare and Air is 0.83. Overlapping area represents the amount of risk that can be diversified away by holding Healthcare Services Group and Air Lease in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Air Lease and Healthcare Services 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 Healthcare Services Group 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 Healthcare Services i.e., Healthcare Services and Air Lease go up and down completely randomly.
Pair Corralation between Healthcare Services and Air Lease
Assuming the 90 days horizon Healthcare Services is expected to generate 18.91 times less return on investment than Air Lease. In addition to that, Healthcare Services is 1.38 times more volatile than Air Lease. It trades about 0.0 of its total potential returns per unit of risk. Air Lease is currently generating about 0.05 per unit of volatility. If you would invest 3,411 in Air Lease on August 28, 2024 and sell it today you would earn a total of 1,429 from holding Air Lease or generate 41.89% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Healthcare Services Group vs. Air Lease
Performance |
| Timeline |
| Healthcare Services |
| Air Lease |
Healthcare Services and Air Lease Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Healthcare Services and Air Lease
The main advantage of trading using opposite Healthcare Services and Air Lease positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Healthcare Services 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.| Healthcare Services vs. CompuGroup Medical SE | Healthcare Services vs. Clearside Biomedical | Healthcare Services vs. Avanos Medical | Healthcare Services vs. LGI Homes |
| Air Lease vs. SENECA FOODS A | Air Lease vs. TreeHouse Foods | Air Lease vs. Transportadora de Gas | Air Lease vs. BII Railway Transportation |
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 Technical Analysis module to check basic technical indicators and analysis based on most latest market data.
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