Correlation Between Noranda Aluminum and Air Lease
Can any of the company-specific risk be diversified away by investing in both Noranda Aluminum 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 Noranda Aluminum and Air Lease into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Noranda Aluminum Holding and Air Lease, you can compare the effects of market volatilities on Noranda Aluminum 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 Noranda Aluminum with a short position of Air Lease. Check out your portfolio center. Please also check ongoing floating volatility patterns of Noranda Aluminum and Air Lease.
Diversification Opportunities for Noranda Aluminum and Air Lease
-0.45 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Noranda and Air is -0.45. Overlapping area represents the amount of risk that can be diversified away by holding Noranda Aluminum Holding and Air Lease in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Air Lease and Noranda Aluminum 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 Noranda Aluminum Holding 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 Noranda Aluminum i.e., Noranda Aluminum and Air Lease go up and down completely randomly.
Pair Corralation between Noranda Aluminum and Air Lease
If you would invest 4,437 in Air Lease on September 4, 2024 and sell it today you would earn a total of 623.00 from holding Air Lease or generate 14.04% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 0.0% |
| Values | Daily Returns |
Noranda Aluminum Holding vs. Air Lease
Performance |
| Timeline |
| Noranda Aluminum Holding |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| Air Lease |
Noranda Aluminum and Air Lease Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Noranda Aluminum and Air Lease
The main advantage of trading using opposite Noranda Aluminum and Air Lease positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Noranda Aluminum 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.| Noranda Aluminum vs. Air Lease | Noranda Aluminum vs. Bright Scholar Education | Noranda Aluminum vs. Cumulus Media Class | Noranda Aluminum vs. Willscot Mobile Mini |
| Air Lease vs. Alta Equipment Group | Air Lease vs. McGrath RentCorp | Air Lease vs. Herc Holdings | Air Lease vs. HE Equipment Services |
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 Content Syndication module to quickly integrate customizable finance content to your own investment portal.
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