Correlation Between Japan Asia and Air Lease
Can any of the company-specific risk be diversified away by investing in both Japan Asia 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 Japan Asia and Air Lease into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Japan Asia Investment and Air Lease, you can compare the effects of market volatilities on Japan Asia 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 Japan Asia with a short position of Air Lease. Check out your portfolio center. Please also check ongoing floating volatility patterns of Japan Asia and Air Lease.
Diversification Opportunities for Japan Asia and Air Lease
0.33 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Japan and Air is 0.33. Overlapping area represents the amount of risk that can be diversified away by holding Japan Asia Investment and Air Lease in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Air Lease and Japan Asia 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 Japan Asia Investment 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 Japan Asia i.e., Japan Asia and Air Lease go up and down completely randomly.
Pair Corralation between Japan Asia and Air Lease
Assuming the 90 days horizon Japan Asia is expected to generate 7.41 times less return on investment than Air Lease. In addition to that, Japan Asia is 1.77 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 3,314 in Air Lease on September 12, 2024 and sell it today you would earn a total of 1,426 from holding Air Lease or generate 43.03% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Japan Asia Investment vs. Air Lease
Performance |
| Timeline |
| Japan Asia Investment |
| Air Lease |
Japan Asia and Air Lease Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Japan Asia and Air Lease
The main advantage of trading using opposite Japan Asia and Air Lease positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Japan Asia 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.| Japan Asia vs. Ameriprise Financial | Japan Asia vs. Ares Management Corp | Japan Asia vs. Superior Plus Corp | Japan Asia vs. SIVERS SEMICONDUCTORS AB |
| Air Lease vs. United Rentals | Air Lease vs. WillScot Mobile Mini | Air Lease vs. Superior Plus Corp | Air Lease vs. SIVERS SEMICONDUCTORS AB |
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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.
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