Correlation Between AerCap Holdings and Aeroports
Can any of the company-specific risk be diversified away by investing in both AerCap Holdings and Aeroports 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 AerCap Holdings and Aeroports into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between AerCap Holdings NV and Aeroports de Paris, you can compare the effects of market volatilities on AerCap Holdings and Aeroports 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 AerCap Holdings with a short position of Aeroports. Check out your portfolio center. Please also check ongoing floating volatility patterns of AerCap Holdings and Aeroports.
Diversification Opportunities for AerCap Holdings and Aeroports
-0.63 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between AerCap and Aeroports is -0.63. Overlapping area represents the amount of risk that can be diversified away by holding AerCap Holdings NV and Aeroports de Paris in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Aeroports de Paris and AerCap Holdings 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 AerCap Holdings NV are associated (or correlated) with Aeroports. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Aeroports de Paris has no effect on the direction of AerCap Holdings i.e., AerCap Holdings and Aeroports go up and down completely randomly.
Pair Corralation between AerCap Holdings and Aeroports
Assuming the 90 days horizon AerCap Holdings NV is expected to generate 1.31 times more return on investment than Aeroports. However, AerCap Holdings is 1.31 times more volatile than Aeroports de Paris. It trades about 0.21 of its potential returns per unit of risk. Aeroports de Paris is currently generating about 0.05 per unit of risk. If you would invest 8,654 in AerCap Holdings NV on September 1, 2024 and sell it today you would earn a total of 556.00 from holding AerCap Holdings NV or generate 6.42% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
AerCap Holdings NV vs. Aeroports de Paris
Performance |
| Timeline |
| AerCap Holdings NV |
| Aeroports de Paris |
AerCap Holdings and Aeroports Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with AerCap Holdings and Aeroports
The main advantage of trading using opposite AerCap Holdings and Aeroports positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if AerCap Holdings position performs unexpectedly, Aeroports 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 Aeroports will offset losses from the drop in Aeroports' long position.| AerCap Holdings vs. PT Bank Maybank | AerCap Holdings vs. LION ONE METALS | AerCap Holdings vs. CDN IMPERIAL BANK | AerCap Holdings vs. Chiba Bank |
| Aeroports vs. ANTA SPORTS PRODUCT | Aeroports vs. Cleanaway Waste Management | Aeroports vs. GRUPO CARSO A1 | Aeroports vs. ePlay Digital |
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 Economic Indicators module to top statistical indicators that provide insights into how an economy is performing.
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