Correlation Between VIVA WINE and Air Lease
Can any of the company-specific risk be diversified away by investing in both VIVA WINE 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 VIVA WINE and Air Lease into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between VIVA WINE GROUP and Air Lease, you can compare the effects of market volatilities on VIVA WINE 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 VIVA WINE with a short position of Air Lease. Check out your portfolio center. Please also check ongoing floating volatility patterns of VIVA WINE and Air Lease.
Diversification Opportunities for VIVA WINE and Air Lease
Pay attention - limited upside
The 3 months correlation between VIVA and Air is -0.84. Overlapping area represents the amount of risk that can be diversified away by holding VIVA WINE GROUP and Air Lease in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Air Lease and VIVA WINE 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 VIVA WINE 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 VIVA WINE i.e., VIVA WINE and Air Lease go up and down completely randomly.
Pair Corralation between VIVA WINE and Air Lease
Assuming the 90 days horizon VIVA WINE GROUP is expected to under-perform the Air Lease. But the stock apears to be less risky and, when comparing its historical volatility, VIVA WINE GROUP is 1.15 times less risky than Air Lease. The stock trades about -0.19 of its potential returns per unit of risk. The Air Lease is currently generating about 0.13 of returns per unit of risk over similar time horizon. If you would invest 4,540 in Air Lease on September 12, 2024 and sell it today you would earn a total of 200.00 from holding Air Lease or generate 4.41% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
VIVA WINE GROUP vs. Air Lease
Performance |
| Timeline |
| VIVA WINE GROUP |
| Air Lease |
VIVA WINE and Air Lease Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with VIVA WINE and Air Lease
The main advantage of trading using opposite VIVA WINE and Air Lease positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if VIVA WINE 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 VIVA WINE GROUP 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. 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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.
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