Correlation Between Safety Shot and Air Lease
Can any of the company-specific risk be diversified away by investing in both Safety Shot 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 Safety Shot and Air Lease into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Safety Shot and Air Lease, you can compare the effects of market volatilities on Safety Shot 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 Safety Shot with a short position of Air Lease. Check out your portfolio center. Please also check ongoing floating volatility patterns of Safety Shot and Air Lease.
Diversification Opportunities for Safety Shot and Air Lease
-0.75 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Safety and Air is -0.75. Overlapping area represents the amount of risk that can be diversified away by holding Safety Shot and Air Lease in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Air Lease and Safety Shot 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 Safety Shot 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 Safety Shot i.e., Safety Shot and Air Lease go up and down completely randomly.
Pair Corralation between Safety Shot and Air Lease
Given the investment horizon of 90 days Safety Shot is expected to generate 4.34 times more return on investment than Air Lease. However, Safety Shot is 4.34 times more volatile than Air Lease. It trades about 0.03 of its potential returns per unit of risk. Air Lease is currently generating about 0.04 per unit of risk. If you would invest 77.00 in Safety Shot on September 20, 2024 and sell it today you would lose (9.00) from holding Safety Shot or give up 11.69% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Safety Shot vs. Air Lease
Performance |
| Timeline |
| Safety Shot |
| Air Lease |
Safety Shot and Air Lease Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Safety Shot and Air Lease
The main advantage of trading using opposite Safety Shot and Air Lease positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Safety Shot 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.| Safety Shot vs. Sellas Life Sciences | Safety Shot vs. Apogee Therapeutics, Common | Safety Shot vs. Biglari Holdings | Safety Shot vs. Tarsus Pharmaceuticals |
| Air Lease vs. McGrath RentCorp | Air Lease vs. Custom Truck One | Air Lease vs. Alta Equipment Group | Air Lease vs. PROG Holdings |
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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