Correlation Between ORIX and AerCap Holdings
Can any of the company-specific risk be diversified away by investing in both ORIX 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 ORIX and AerCap Holdings into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between ORIX Corporation and AerCap Holdings NV, you can compare the effects of market volatilities on ORIX 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 ORIX with a short position of AerCap Holdings. Check out your portfolio center. Please also check ongoing floating volatility patterns of ORIX and AerCap Holdings.
Diversification Opportunities for ORIX and AerCap Holdings
-0.49 | Correlation Coefficient |
Very good diversification
The 3 months correlation between ORIX and AerCap is -0.49. Overlapping area represents the amount of risk that can be diversified away by holding ORIX Corp. 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 ORIX 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 ORIX Corporation 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 ORIX i.e., ORIX and AerCap Holdings go up and down completely randomly.
Pair Corralation between ORIX and AerCap Holdings
Assuming the 90 days horizon ORIX is expected to generate 1.03 times less return on investment than AerCap Holdings. In addition to that, ORIX is 1.78 times more volatile than AerCap Holdings NV. It trades about 0.14 of its total potential returns per unit of risk. AerCap Holdings NV is currently generating about 0.26 per unit of volatility. If you would invest 8,797 in AerCap Holdings NV on August 28, 2024 and sell it today you would earn a total of 655.00 from holding AerCap Holdings NV or generate 7.45% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
ORIX Corp. vs. AerCap Holdings NV
Performance |
| Timeline |
| ORIX |
| AerCap Holdings NV |
ORIX and AerCap Holdings Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with ORIX and AerCap Holdings
The main advantage of trading using opposite ORIX and AerCap Holdings positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ORIX 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.| ORIX vs. Superior Plus Corp | ORIX vs. NMI Holdings | ORIX vs. Origin Agritech | ORIX vs. SIVERS SEMICONDUCTORS AB |
| AerCap Holdings vs. Enter Air SA | AerCap Holdings vs. CosmoSteel Holdings Limited | AerCap Holdings vs. Boiron SA | AerCap Holdings vs. Corsair Gaming |
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 Price Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.
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