Correlation Between Ming Le and AerCap Holdings
Can any of the company-specific risk be diversified away by investing in both Ming Le 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 Ming Le and AerCap Holdings into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Ming Le Sports and AerCap Holdings NV, you can compare the effects of market volatilities on Ming Le 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 Ming Le with a short position of AerCap Holdings. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ming Le and AerCap Holdings.
Diversification Opportunities for Ming Le and AerCap Holdings
0.56 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Ming and AerCap is 0.56. Overlapping area represents the amount of risk that can be diversified away by holding Ming Le Sports 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 Ming Le 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 Ming Le Sports 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 Ming Le i.e., Ming Le and AerCap Holdings go up and down completely randomly.
Pair Corralation between Ming Le and AerCap Holdings
Assuming the 90 days trading horizon Ming Le Sports is expected to generate 3.24 times more return on investment than AerCap Holdings. However, Ming Le is 3.24 times more volatile than AerCap Holdings NV. It trades about 0.1 of its potential returns per unit of risk. AerCap Holdings NV is currently generating about 0.12 per unit of risk. If you would invest 109.00 in Ming Le Sports on September 3, 2024 and sell it today you would earn a total of 30.00 from holding Ming Le Sports or generate 27.52% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Ming Le Sports vs. AerCap Holdings NV
Performance |
| Timeline |
| Ming Le Sports |
| AerCap Holdings NV |
Ming Le and AerCap Holdings Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ming Le and AerCap Holdings
The main advantage of trading using opposite Ming Le and AerCap Holdings positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ming Le 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.| Ming Le vs. Sqs Software Quality | Ming Le vs. Burlington Stores | Ming Le vs. VITEC SOFTWARE GROUP | Ming Le vs. Take Two Interactive Software |
| AerCap Holdings vs. Perseus Mining Limited | AerCap Holdings vs. FAST RETAIL ADR | AerCap Holdings vs. Ubisoft Entertainment SA | AerCap Holdings vs. CNVISION MEDIA |
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 Fundamentals Comparison module to compare fundamentals across multiple equities to find investing opportunities.
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