Correlation Between SNDL and AerCap Holdings
Can any of the company-specific risk be diversified away by investing in both SNDL 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 SNDL and AerCap Holdings into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between SNDL Inc and AerCap Holdings NV, you can compare the effects of market volatilities on SNDL 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 SNDL with a short position of AerCap Holdings. Check out your portfolio center. Please also check ongoing floating volatility patterns of SNDL and AerCap Holdings.
Diversification Opportunities for SNDL and AerCap Holdings
-0.1 | Correlation Coefficient |
Good diversification
The 3 months correlation between SNDL and AerCap is -0.1. Overlapping area represents the amount of risk that can be diversified away by holding SNDL Inc 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 SNDL 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 SNDL Inc 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 SNDL i.e., SNDL and AerCap Holdings go up and down completely randomly.
Pair Corralation between SNDL and AerCap Holdings
Given the investment horizon of 90 days SNDL is expected to generate 1.43 times less return on investment than AerCap Holdings. In addition to that, SNDL is 2.99 times more volatile than AerCap Holdings NV. It trades about 0.03 of its total potential returns per unit of risk. AerCap Holdings NV is currently generating about 0.14 per unit of volatility. If you would invest 5,820 in AerCap Holdings NV on August 29, 2024 and sell it today you would earn a total of 4,089 from holding AerCap Holdings NV or generate 70.26% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
SNDL Inc vs. AerCap Holdings NV
Performance |
| Timeline |
| SNDL Inc |
| AerCap Holdings NV |
SNDL and AerCap Holdings Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SNDL and AerCap Holdings
The main advantage of trading using opposite SNDL and AerCap Holdings positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SNDL 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.The idea behind SNDL Inc and AerCap Holdings NV pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.| AerCap Holdings vs. Ryder System | AerCap Holdings vs. Alta Equipment Group | AerCap Holdings vs. PROG Holdings | AerCap Holdings vs. GATX Corporation |
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 FinTech Suite module to use AI to screen and filter profitable investment opportunities.
Other Complementary Tools
| Portfolio Rebalancing Analyze risk-adjusted returns against different time horizons to find asset-allocation targets | |
| Idea Optimizer Use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio | |
| Efficient Frontier Plot and analyze your portfolio and positions against risk-return landscape of the market. | |
| Portfolio Optimization Compute new portfolio that will generate highest expected return given your specified tolerance for risk | |
| Equity Forecasting Use basic forecasting models to generate price predictions and determine price momentum |